EMPLOYEE BENEFITS AND EXECUTIVE COMPENSATION: DESCRIPTION

MLA has a well-established Employee Benefits and Executive Compensation practice, which is primarily concerned with compliance with what has been, for many years now, a steady stream of statutory and regulatory changes. Most employee benefits and executive compensation issues are governed by the Internal Revenue Code of 1986, as amended ("Code") (as enforced by the Internal Revenue Service) and the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (as enforced by the U.S. Department of Labor). Recent legislation, including the Older Workers Benefits Protection Act, the Americans With Disabilities Act, the Family and Medical Leave Act and the Health Insurance Portability and Accountability Act, has broadened the scope of plan compliance and regulation.

Further, much of the recent legislation has blurred the distinctions between employment law and employee benefits law so that employers must be aware of the requirements for compliance under all regulatory authorities. Many of the changes in the law have retroactive or delayed effective dates and plan administration must meet compliance as of those effective dates. Because of the constant change in this area of law, many clients do not know whether their benefits currently are in compliance or whether benefits which are being contemplated would be feasible. Because the employer and all plan fiduciaries are subject to suit by employees and their beneficiaries, it is imperative that all plan documentation be in order to defend any such claims or suits.

The members of the employee benefits and executive compensation team devote a substantial portion of their time and energy to the design, drafting, implementation and administration of qualified retirement plans (including 401(k) plans, profit sharing plans, defined benefit plans, cash balance plans and ESOPs), nonqualified deferred compensation arrangements and executive compensation and incentive programs, including equity-based compensation programs. We also work with many clients in the design, implementation and compliance of group health, life insurance, disability and other welfare plans, including cafeteria plans. This type of service covers fiduciary issues and tax and other regulatory compliance.

Many of our clients call frequently for assistance in the day-to-day administration of employee benefits plans (such as determining eligibility for leased employees, review of QDROs and QMCSOs and nondiscrimination testing). Our practice in this area centers on the representation of corporate and other plan sponsors, both large and small. This team excels not only in the provision of day-to-day advice, but also in the resolution of complex issues and transactions, including multiple plan mergers, leveraged ESOP transactions and business acquisitions and dispositions. We represent clients before the Internal Revenue Service, the U.S. Department of Labor and the Pension Benefit Guaranty Corporation.

If given the opportunity to work with a client on employee benefits matters, we develop our work in the manner in which the client desires. For instance, depending on the client's current needs, we could provide services for plan design and implementation, compliance review, day-to-day administrative and compliance questions or overall representation.

Providing advice and counseling, the lawyers take into account not only the technical legal issues, but also the practical aspects that are important to the client's overall business operations. Such advice and consultation by the team's lawyers is always given with an eye toward avoiding potential liability and litigation and toward improving the client's position if the event litigation should occur.

TYPES OF SERVICES PROVIDED

MLA offers clients who desire a thorough evaluation of their employee benefits policies and practices an "employee benefits audit" or a comprehensive audit of both employment and employee benefits matters, which review a client's records, plans, policies and procedures in an effort to identify any problems and to propose corrective action to help assure full compliance with legal requirements.  

Day-to-Day Consultation

One of the most useful services this team provides in the area of employee benefits law is to have lawyers available by telephone or in person to answer questions which may arise on a day-to-day basis or to review and revise documents. We generally designate one lawyer as the primary contact point for a client's questions concerning employee benefits. It is our team member's responsibility either to furnish timely responses to the client's questions or to enlist the assistance of additional lawyers to obtain the information as expeditiously as necessary. We designate additional lawyers that are capable of furnishing similar services to function in a back-up capacity.

Our consultation services include, among other things:

• Designing, drafting and assisting in implementation of all types of employee benefit plans and executive compensation arrangements, including equity-based compensation
• Reviewing existing or proposed employee benefit plan documents for technical compliance, including summary plan descriptions
• Filing of plans with Internal Revenue Service for determination as to tax-exempt status and with the Department of Labor for top-hat status
• Representing clients before Internal Revenue Service, U.S. Department of Labor and/or Pension Benefit Guaranty Corporation, in both voluntary and involuntary compliance reviews and audits
• Counseling regarding administrative issues, including nondiscrimination testing issues, benefits eligibility, calculations, review of proposed qualified domestic relations orders and participant claims
• Advising on employee benefits issues involved in hiring, discipline, discharge and reductions in force, including appropriate documentation, in light of applicable state and federal laws, including nondiscrimination laws
• Advising on employee benefits issues involved in hiring, discipline, discharge and reductions in force, including designing, drafting and implementing various types of golden parachute agreements
• Advising on employee benefit issues related to the Americans with Disabilities Act, the Family and Medical Leave Act and state and federal laws related to veterans
• Designing, reviewing and revising employment contracts and independent contractor arrangements
• Designing, reviewing and revising severance plans and/or individual severance agreements
• Counseling, drafting communications and advising regarding Age Discrimination in Employment Act in connection with implementing reductions in force
• Preparing and reviewing employee benefits disclosures and procedures, including employee handbooks, policies and procedures manuals, management manuals
• D rafting and reviewing of routine correspondence relating to employment issues
• Reviewing proposed new policies 

Educational Presentations and Materials

Members of the firm's Employee Benefits and Executive Compensation team often conduct seminars for our clients' employees and participate in smaller meetings or discussion panels, usually limited to managers or supervisors. In addition, we are available on a regular basis for instructional meetings with management and board of directors in all areas regarding executive compensation. Often these meetings focus on legal compliance and litigation avoidance.

In addition, we are experienced in preparing written materials concerning a variety of current issues for distribution to employees, managers and supervisors. As a practical matter, we try to make our communication materials easy to understand, considering the complicated nature of our subject matter.

The format and sophistication of our seminars varies depending upon the number of attendees and the client's desires. Larger seminars may include video presentations and lectures, while smaller seminars sometimes are more effectively conducted through a presentation or a panel discussion.  

Employee Benefits Audit

We often find it helpful to begin such a relationship with a review of the client's existing plans. The depth of such a review may vary from an overview of existing plans to a complete technical audit, depending on the needs and desires of the client. Any review usually begins with a preliminary meeting for the purpose of determining the goals and expectations of the company with regard to audit, the current benefit structure and the compilation of plan documents. Together we can determine any other specific materials or files to be gathered and reviewed.

A comprehensive technical audit may be appropriate for a client to consider. Such an audit would assess the level of the client's current compliance and give us an opportunity to identify any legal or operational defects and to recommend methods of correction and future operation. Our advice in this area is intended to minimize any adverse tax consequences to a client and its employees and to limit the client's fiduciary liabilities under ERISA. Further, in proceeding with a general representation of a client in this area, we would then have complete files and a thorough understanding of the client's benefits issues and could provide a more efficient representation.

We would expect the audit to include, but not necessarily be limited to, review and analysis of the following, subject to any deletions or additions the client desires:

• Identify all existing employee benefit plans including retirement plans, welfare plans (such as insurance coverage), equity-based plans, executive compensation plans, etc.
• Review all existing plan documentation
• Review tax-qualified plans for compliance with qualification requirements, including nondiscrimination, minimum coverage and minimum participation testing
• Review all plans for reporting and disclosure compliance, including summary plan descriptions, annual reports and summary annual reports
• Review all group health plans (such as group health, dental, vision, medical reimbursement, etc.) for COBRA continuation coverage, HIPAA and MHPA compliance
• Review all executive compensation and other nonqualified plans for ERISA and Code compliance, including funding, reporting and disclosure requirements
• Review all equity-based plans for compliance with SEC Rule 16b-3, Code Section 162(m) and other legal requirements
• Review all plans for substantive discrimination issues, including age, sex, race and disability discrimination
• Review all tax-qualified retirement plans for compliance with qualified domestic relations orders procedures and all medical plans for compliance with qualified medical child support orders procedures
• Review all tax-qualified defined benefit retirement plans for compliance with PBGC premium and reporting requirements
• Review all multi-employer plan issues, including contributions and potential withdrawal liabilities
• Review all multiple employer plan issues, including proper annual filing methods
• Review all retiree benefit plans for reservation of amendment rights and accounting issues
• Review administrative practices for compliance with plan documentation
• Review administrative practices for compliance with record retention requirements

This type of audit should prepare a client for any IRS or U.S. Department of Labor audits, as well as prepare for any potential employee or beneficiary claims or disputes. Numerous cases have been decided in recent years regarding the necessary language to preserve an employer's rights with regard to changing or terminating its plans. Courts have taken the position that plan documents must be carefully crafted with explicit, easy-to-understand language that preserves the employer's rights in order for those rights to be enforceable.

We are pleased to work with a client in any type of relationship that would be helpful to the client in maintaining its employee benefit plans in legal compliance.

Dispute Resolution

MLA also is prepared to assist clients in dispute resolution, which includes ERISA administrative procedures, litigation, mediation and /or arbitration of employee benefits matters. The employee benefits expertise of our team members, in conjunction with the litigation expertise of our Litigation team, offer our clients a well-positioned representation on all types of employee benefits or executive compensation matters that may arise between employers and employees or between employers and vendors.