When an employer contemplates an acquisition, merger, or other corporate transaction, the employer often wants to be certain that key employees remain during (and often for a time after) the transition. Retention agreements are useful for this purpose and can provide...
The SECURE 2.0 Act added an exception to the 10% early distribution penalty tax under I.R.C. § 72(t) for "emergency personal expense distributions" from a defined contribution plan. The exception, discussed under I.R.S. Notice 2024-55 , recognizes...
The U.S. Department of Labor (DOL) issued final rules in late April regarding its definition of fiduciary investment advice and associated prohibited transaction exemptions (PTEs). The rule and amended PTEs will protect retirement investors by requiring trusted...
Plan sponsors, administrators, and even qualified termination administrators may need to locate missing participants or beneficiaries. It may be time for the required minimum distribution to begin or pay a designated beneficiary. The employee may have terminated...
Plan sponsors may want guidance on how to implement a self-audit program. This is especially useful for small plans that may not be subject to ERISA’s annual audit requirement but need review of their processes and financial statements. Two common errors...
A flexible spending arrangement (often referred to as an “FSA” for the flexible spending account that is established for a participating employee) is one benefit employers may offer in a cafeteria plan to allow participating employees to use pre-tax...
Section 1557 of the Affordable Care Act (ACA) prohibits discrimination on the basis of race, color, national origin, sex, age, or disability, or any combination thereof, in a health program or activity, any part of which is receiving federal financial assistance...
The SECURE 2.0 Act made significant changes to the IRC and ERISA, as applied to tax-favored retirement plans. Section 121 of the SECURE 2.0 Act amended IRC § 401(k) to authorize a simplified cash or deferred arrangement, called a starter 401(k) plan. The plans...
In late April, the U.S. Department of Labor released its new fiduciary investment advice definition in a package titled the '' Retirement Security Rule '' (the 2024 Package). The 2024 Package is made up of four different components and represents...
If a qualified plan, like a 401(k) plan or an employee stock ownership plan (ESOP), offers employer securities as an investment, and the participant, on termination of employment, takes a total plan distribution (a lump-sum distribution) that includes actual shares...
ERISA and tax-favored retirement plans are primarily intended to provide retirement income to plan participants and their beneficiaries. Unrestricted access to retirement savings before retirement generally is not permitted, but plans, particularly 401(k) plans...
The Federal Trade Commission issued a final rule that prohibits new non-compete agreements with workers, with limited exceptions for business transactions. The rule provides that existing non-compete agreements with non-senior executives become unenforceable as...
Section 162(m) limits the deductibility of taxable compensation paid in any tax year to covered employees of publicly held corporations and certain affiliates to the extent such compensation exceeds $1 million (per covered employee). The Tax Cuts and Jobs Act changed...
Employers sometimes require employees to provide a specific amount of notice before resigning. This is likely set forth in the terms of an employment agreement. During the notice period, employers may instruct the employee not to come to work, but the employer...
Supplemental Executive Retirement Plans, or SERPs, are structured to avoid most rules that apply to qualified plans that limit the ultimate benefit that can be derived from the plan. SERPs are simply contractual promises to participants to pay an amount to them...