12 Mar 2024
What’s the Plan? Addressing Post-Merger Employee Benefits
Long before the closing agreement is signed, the acquiring company has to decide what to do with employees who transfer with the bargain and the benefit plans in which they’ll participate. In asset acquisitions where the buyer does not acquire the seller's employee benefits plans, or in a carve-out transaction where the parent or seller's plans do not transfer to the buyer, the acquired employees need to be transitioned to the buyer's employee benefit plans. This transition is critical for employee retention and satisfaction.
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Practical Guidance Updates
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- Employee Benefits & Executive Compensation Key Legal Developments Tracker
Stay informed on new developments.- ERISA Litigation. A class of nearly 40,000 Xerox Corp. employees have requested final approval of a $4.1 million settlement with Xerox resolving accusations the company allowed plan recordkeeping fees costing up to four-times more than what similar comparators charged. Xerox Workers Seek Final OK of $4.1M Deal over 401(k) Fees (Carrigan v. Xerox Corp., No. 3:21-CV-1085).
- Retirement Plans. IRS Employee Plans has started the second phase of their pilot Pre-Examination Retirement Plan Compliance Program. As a part of this program, plan sponsors are notified by letter that their retirement plan has been selected for an upcoming examination. The letter gives plan sponsors a 90-day window to review their plan’s document and operations to determine if they meet current tax law requirements.IRS, Employee Plan News (Feb. 7, 2024).
- Health and Welfare Plans. S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) and the National Institute of Standards and Technology (NIST) published a new, final version of their guidance for regulated healthcare entities to follow to improve cybersecurity and compliance with the Health Insurance Portability and Accountability (HIPAA) Security Rule. Special Publication (SP) 800-66 Revision 2, Implementing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule: A Cybersecurity Resource Guide.
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