Employee Benefits and Executive Compensation

At FordHarrison, attorneys in our Employee Benefits and Executive Compensation Practice Group can help you handle all aspects of your employee benefit programs. We represent both large and small employers, whether for-profit, private or publicly traded, tax-exempt, or governmental in nature. We have experience in virtually every area of employee benefits law, including retirement plans, executive compensation, health and welfare plans, ERISA fiduciary compliance and planning and the interaction of the multiple laws affecting employee benefits, including the IRC, ERISA, various labor and employment laws, corporate laws and securities laws. We’ll sit down and talk with you about your business needs and goals, and show you how a properly designed benefits program can help you achieve those goals. We’ll work with you to design and implement the programs that make sense for you. We’ll help you create the processes and procedures you’ll need to run your plans, and serve as a resource when you have questions. As your company grows, we can help you evaluate whether your plans should change as well. And if a program stops making sense, we can even help you terminate it. Here are just a few of the things we can do:

Mergers and Acquisitions. If you are getting ready to buy or sell the stock or assets of another company, to obtain or renegotiate financing for your business, or to restructure your business operations, don’t forget about employee benefits. Mergers and acquisitions and other business transactions of any size require both pre- and post-closing strategic planning. You should have an employee benefits attorney review the plan documents and operation of any company you plan to buy, as well as the transaction documents, so you don’t find yourself on the hook for unanticipated liabilities. If you’re acquiring another company, the acquisition agreement should specifically address how all pension and welfare plans will be handled, including post-transaction 401(k) and pension benefits, COBRA responsibility, severance payments and equity compensation plans. It should also have built-in protections against unforeseen ERISA and tax liabilities associated with the seller’s employee benefits plans and executive compensation agreements.

Our Employee Benefits and Executive Compensation Practice Group has extensive experience navigating and helping clients manage the myriad employee benefits and executive compensation issues that employers may face in corporate transactions.  If you’re buying another company, the attorneys in this Group can assist you on the front-end of an acquisition to conduct due diligence, create protections for you in the acquisition agreement, identify cost-saving strategies and opportunities, structure incentives to retain key talent, and plan a comprehensive and successful integration. Our team can also assist you on the back-end of an acquisition to facilitate a smooth transition, including plan termination, plan spin-offs and mergers, and provide participant communications and notices.  If you’re selling, our team can help you negotiate employee benefit liabilities with the buyer and, if you’re selling assets and have union employees, help you avoid costly exposure to multiemployer pension plan liability.

Plan Documentation. Federal law requires that most benefit programs be documented in writing. Typically, an insurance contract or benefits booklet issued by an insurance company isn’t enough. Retirement plans particularly must contain a lot of special language if you want the tax advantages they can provide. You will also need a summary plan description – an easy-to-read summary of the provisions of the plan. Again, most benefits booklets fall short of the mark. Other documents you might need include a trust document to hold any plan assets, administrative forms to operate your programs, and service provider contracts that clearly identify the responsibilities of each party. We can help create the documents you’ll need, or review those you already have or are negotiating with various service providers, to make sure you’re in compliance with the law and that your company is protected.

Plan Operation. The key here is operating your plan the way it is written. Your benefit programs are essentially contracts with your employees. If your plan documents are properly drafted, you can typically avoid a lot of problems if you just follow the terms of your plans. But when the language isn’t clear, or a particular situation isn’t addressed, we can help you decide what to do. And if the document language wasn’t followed, we can help you correct the error and protect the company from further liability.

Compliance. There are all sorts of rules that dictate who can participate in your plan (and whom you can exclude), how soon you have to let them in, and what types of benefits you can provide. In general, these rules are designed to make sure your plans don’t favor your highly paid employees at the expense of the rank and file (after all, the tax advantages of your plans don’t come without strings). In many cases, annual testing must be done to make sure these rules are satisfied – not just for retirement plans, but for certain welfare plans as well. Also, for most of your plans, you’ll have to file reports (called Form 5500s) with the Department of Labor (DOL) and the Treasury Department on an annual basis. We can help you identify those plans that require Form 5500s. We can also help if your plans fail the required compliance tests, or if Form 5500s are not filed.

Pension Plans. Our Employee Benefits and Executive Compensation Practice Group has a wealth of experience in pension plans, including both defined contribution plans (e.g., 401(k) plans) and defined benefit pension plans. We can advise and assist in the design and drafting of your pension plans whether you are a for-profit or tax-exempt employer. We can also advise on pension plan regulatory compliance issues whether you are a private or public-sector employer; tax issues for both employers and employees arising in connection with pension plans; retirement plan administration, including qualified domestic relations orders, plan investment programs relating to qualified plan failures, reporting and disclosure failures, and breaches of fiduciary duty; audits and examinations; and filing required notices, reporting, and disclosures. We have represented numerous employers before these agencies.

Equity and Equity-Based Compensation. You may want to allow your employees or key executives to share in the growth of your company, or tie their discretionary compensation to growth factors in order to encourage strong performance. From broad-based programs such as employee stock purchase plans to more selective programs such as stock options and grants of stock or stock appreciation rights, equity or equity-based compensation programs could be an important component of your company's overall compensation strategy. We can help you decide which type of program best suits your needs, and will work with your accounting and securities law professionals to implement the program. We will also make sure any proposed or existing program complies with applicable tax laws.

Dispute Resolution. Disagreements over benefits are bound to arise from time to time. A participant in the health care plan may challenge the denial of a particular treatment. An ex-employee may claim you failed to notify him or her of his or her Consolidated Omnibus Budget Reconciliation Act (COBRA) rights. Your service providers may make mistakes that cost you and plan participants’ money. Participants in your 401(k) plan may be unhappy with investment results. We can help you avoid most disagreements through proactive prevention. But when a dispute arises, we can help you respond appropriately and recommend a course of action. If litigation is unavoidable, our attorneys will work diligently to protect your interests.

Fiduciary Concerns. If your plans are subject to ERISA, and most are, your company – and/or certain individuals employed by it – will be considered fiduciaries of those plans. In a nutshell, that means that when you are operating the plan, you must act in the best interests of plan participants, must follow the terms of the plan, and must make sure the assets of the plan are prudently managed. If you don’t live up to your fiduciary duties, you could be held personally liable for any losses that result. We can help you understand your responsibilities, and discuss options for minimizing your risks.

Contract Review. Your service provider contracts should clearly identify the responsibilities of each party, how the provider will be compensated, and when and under what circumstances the relationship will end. You may want to build in incentives for performance or penalties for failure to perform. We can review your service provider contracts and make sure the terms are fair to both parties and that all necessary terms have been addressed. 

Plan Audits. Now more than ever before, retirement and health care plans are subject to a maze of federal regulation, exposing your company to significant financial liability. Your plan may be subject to the reporting, disclosure and fiduciary rules of ERISA, the continuation coverage provisions of COBRA, the nondiscrimination, portability, and privacy rules of the Health Insurance Portability and Accountability Act (HIPAA), the employer shared responsibility payment rules of the Affordable Care Act (ACA), tax rules of the IRC, federal (and state) securities laws, and other federal and state laws. We can audit your company's compliance with applicable laws in order to avoid or minimize penalties, taxes and lawsuits. We can also assist with health care plan dependent eligibility audits, which can reduce your health care costs substantially.

ERISA Disputes. Negotiating the challenging terrain of ERISA requires specialized expertise and experience. Attorneys in our Employee Benefits and Executive Compensation Practice Group work with our litigation attorneys to protect our clients’ interests in the following areas: 

• complex preemption issues;
• compliance with ERISA’s notice, reporting and disclosure requirements;
• claims for breach of fiduciary duties and for engaging in transactions prohibited by ERISA;
• claims for benefits discrimination, retaliation and wrongful interference with benefits;
• withdrawal liability and delinquent contribution claims;
• claims involving multiple employer arrangements, including MEWA’s;
• claims for breach of fiduciary duties related to nondisclosure of revenue sharing and 401k excessive fees;
• claims regarding investment options, including annuities; and
• disputes between ERISA plans and their service providers.

Because FordHarrison is a national firm, we’re able to litigate in courts across the country, and represent clients before the IRS, the DOL and other government agencies. The team also provides valuable claim avoidance and risk assessment services. The breadth and depth of our team enables FordHarrison to effectively and efficiently address any ERISA-related issue that you may encounter, from plan formation and administration through litigation.

International Experience. FordHarrison counsels clients on the application of U.S. tax laws to U.S. citizens and residents performing services outside of the U.S. and specifically have worked with Claeys & Engels on projects considering the U.S. tax treatment of U.S. persons providing services to Belgian entities. We also advise clients on the U.S. Foreign Account Tax Compliance Act (FATCA) obligations of U.S. beneficiaries of non-U.S. deferred compensation and equity compensation arrangements.

Additionally, we advise employers and employees – both expats and inpats – regarding the US (and sometimes State) tax consequences resulting from cross-border assignments. This typically involves income tax and Social Security taxes, including withholding and related requirements, and often requires taking into account the provisions of income tax conventions and/or Social Security Totalization Agreements, when they exist. We also provide similar advice in situations involving persons who are not employees, i.e., independent contractors. When appropriate, we will also advise the employer or employee (or contractor) concerning returns that may need to be filed or amended, and where necessary, may make a referral to a qualified tax accountant to assist in preparing such a return.

If you would like us to prepare a proposal to assist your company with your labor and employment law needs, please contact clientservice@fordharrison.com.