Benefits and ESOPs

The ESOPs practice offers over 30 years of experience with ESOPs and related transactions, providing a complete range of services, including ESOP establishment, the structuring of corporate transactions involving ESOPs, fiduciary issues, S-Corporations as they relate to ESOPs, and the special tax opportunities associated with ESOP transactions.

Our clients are employers, including publicly-traded, closely-held, non-profit, and governmental organizations, that maintain one or more tax-qualified retirement, employee stock ownership, employee stock purchase plans, and health and welfare plans. 

AREAS OF PRACTICE

Qualified Plans

We help our clients navigate the complex qualification rules of the Internal Revenue Code and ERISA requirements governing design and creation, administration and operation, freeze and termination of qualified plans such as defined benefit pension plans, profit sharing plans, 401(k) plans and money purchase plans. We also advise regarding securities law issues related to qualified plans and maintain a strong practice in collectively bargained plans.

When establishing a new plan, we assist with documentation, transitioning from any pre-existing plans, and preparing all legally required notices and other participant communications.

We advise plan sponsors and record-keepers on all areas related to plan operation and administration, including nondiscrimination testing, defined benefit plan funding rules, anti-cutback rules with respect to accrued benefits, and ERISA claims procedures. We also help prepare and submit applications under the Internal Revenue Service’s Employee Plans Compliance Resolution System (EPCRS). 

We also help plan sponsors navigate the complex rules applicable to the freeze and/or termination of qualified retirement plans, including defined benefit plans. With respect to defined benefit plans, we have structured plan spin-off terminations and developed strategies for merging underfunded and overfunded plans to help strengthen the overall plan asset-to-liability ratio and reduce the excise tax on plan reversions. 

Health and Welfare Benefit Plans, Fringe Benefits, and Other Programs

We provide our clients with the full breadth of legal advice necessary to meet the immense regulatory burden that exists, in part, under the Patient Protection and Affordable Care Act (PPACA), the Consolidated Omnibus Budget Reconciliation Act of 1984 (COBRA), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for all types of health and welfare plans, including group health plans, HSAs, HRAs, disability plans, life insurance plans, cafeteria plans, and severance programs. 

We are also often called upon by our clients to assist with the design and implementation of fringe benefit and other health and welfare programs.

Governmental, Nonprofits, and Universities

Our clients include state and local governmental entities and nonprofit organizations such as universities. As a result, we are experienced in the unique employee benefits needs of these types of organizations and the employee benefit opportunities available to them and we are adept at providing advice pertaining to the design, implementation, and administration of 403(b) plans, 415(m) arrangements, and qualified and nonqualified Section 457(b) and 457(f) plans.

Mergers and Acquisitions

Employee benefit considerations often play a critical role in corporate transactions such as reorganizations, mergers, stock acquisition and sales, asset sales and purchases, joint ventures, and bankruptcies. 

We have extensive experience in analyzing the employee benefit aspects of corporate transactions, including the assessment of employee benefit liabilities, which can include unfunded pension and other post-retirement benefits, withdrawals from multiemployer pension plans, delinquent plan contributions, severance pay, and executive benefits; the negotiation of the representations and warranties with respect to employee benefits; formulation of the most advantageous corporate structure; and the development and implementation of post-transaction employee benefit strategies. 

Multiemployer Pension and Welfare Plans

We advise trustees and contributing employers regarding funding, fiduciary, and other obligations unique to union-sponsored multiemployer pension and welfare plans. We also assist trustees with plan design, documentation, and benefit claims appeals and work with investment managers and third-party administrators in connection with issues arising under these programs for active and retired workers.

Fiduciary Duties and Prohibited Transactions

Through the combined efforts of our Asset Management and Investment Funds and Benefits and ESOPs practices, we counsel plan sponsors, investment advisers, trustees, third party administrators, and other parties, including mutual fund complexes and other financial services firms, with respect to the fiduciary and prohibited transaction issues arising under ERISA raised by the nature of their services. We also work extensively with plan sponsors and service providers to prepare for and comply with DOL reporting and disclosure requirements. 

Plan governance is another important area in which we assist plan sponsors and plan fiduciaries, including fiduciary training.

ESOPs

We assist clients, including private equity firms looking to ESOP formation as an attractive exit strategy, in analyzing whether an ESOP is appropriate for their particular situation and, where appropriate, take all steps necessary to implement an ESOP.  We have extensive expertise in analyzing whether ESOP-owned corporations should take advantage of the particular tax advantages available through S-Corporation status election and in restructuring a corporation to enable it to take advantage of the S-Election. 

We also provide guidance with respect to all aspects of Section 1042 ESOP transactions and have been involved in restructuring corporations for purposes of Section 1042, designing specialized securities to be acquired by the ESOP, implementing and negotiating the ESOP acquisition, and assuring that ERISA fiduciary requirements are satisfied. 

Our expertise in the ESOP space allows us to identify unique liabilities that may exist in ESOP-owned corporations to the benefit of clients looking to acquire or invest in such corporations, to oversee the termination of ESOPs and the distribution of ESOP assets upon termination, and to represent corporate fiduciaries in ESOP transactions to ensure compliance with ERISA fiduciary duties.

Pension Risk Transfers

As the cost of providing employee benefits, particularly defined benefit plan benefits, has only seemed to increase over the years, we have been a leader in the pension risk transfer transaction space. Since the inception of the field, we have represented numerous plan sponsors and independent fiduciaries in plan purchases of group annuity contracts transferring billions of dollars of pension liability