The competition among employers to attract and retain the best and the brightest talent has never been more intense. The competition is waged, at least in part, through employee benefit programs such as retirement plans and health plans, which consistently rate among the top employee concerns. In light of the importance and the high cost of benefits, employers have become increasingly focused on this area.
K&L Gates employee benefits lawyers provide employers, and a wide variety of other stakeholders in the employee benefits industry, the tools they need to engage in the competition for talented labor and to manage the consequent regulatory burden and cost of providing competitive employee benefits.
Our lawyers provide the full range of legal services relating to employee benefits, including tax, labor, securities, regulatory and legislative, litigation, and fiduciary issues relating to plan administration and the investment of plan assets. With lawyers located throughout the United States, we provide our clients with a variety of legal services related to the implementation, administration, freeze and termination of retirement plans, health care programs, equity compensation plans, executive compensation programs, employment contracts, welfare benefit plans, and fringe benefit programs. We also offer advice concerning fiduciary responsibility and prohibited transaction issues; representation and advocacy before federal governmental agencies with jurisdiction over employee benefit plans such as the Internal Revenue Service (IRS), the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation; strategic advice concerning employee benefit plans in corporate mergers and acquisitions; and litigation with respect to a variety of employee benefit matters.
Our clients are employers, including publicly traded, closely held, nonprofit, and governmental organizations, that maintain one or more tax-qualified retirement, employee stock ownership, incentive stock option, deferred compensation, employee stock purchase plans, and/or welfare plans.
Qualified retirement plans - such as defined benefit pension plans (including cash balance plans), profit sharing plans, 401(k) plans, money purchase plans, stock bonus plans, and Employee Stock Ownership Plans - are among the most heavily regulated of all employee benefit plans. We help our clients navigate the complex qualification rules of the Internal Revenue Code in all phases of the life of a qualified retirement plan’s design and creation, administration and operation, freeze and termination. We maintain a strong practice in collectively bargained plans, particularly in the steel and related heavy industries.
In the design and creation stage, we help many of our clients determine which type of plan best suits their needs and assist in the documentation of the plan, generally either by drafting the plan document and summary plan description or reviewing the documents prepared by the provider of a prototype plan. For many clients, the adoption of a new plan entails the freezing or termination of another plan, and we assist in both the transition to the new plan as well as the termination of the old one. We also assist clients making plan changes or adopting new plans with legally required notices and other participant communications.
In the administration and operation stage, we help plan sponsors and recordkeepers monitor and maintain compliance with the qualification rules for established plans. Areas in which we frequently advise our clients include nondiscrimination testing, defined benefit plan funding rules, cutbacks in accrued benefits, maximum benefits under Section 415 of the Internal Revenue Code, and many other areas. We assist employers in handling benefit claims disputes, including advising the plan fiduciaries through the ERISA claims procedures.
We help many plan sponsors negotiate the rules applicable to the freeze and/or termination of qualified retirement plans, including defined benefit plans, for which the rules are particularly complex. We have structured defined benefit plan spin-off terminations, thereby allowing the sponsoring employers to recapture excess plan assets. In response to changes in the law that complicate plan termination/reversion transactions, we develop strategies for merging underfunded and overfunded defined benefit plans into a single plan to help strengthen the overall plan asset-to-liability ratio and to reduce the 50 percent excise tax on plan reversions. The transition from defined benefit plans to defined contribution plans can be particularly complex. We have worked with several plan sponsors to navigate the transition from evaluation and design, to documentation, implementation, and communication.
A substantial part of our qualified retirement plan practice involves the preparation and submission of applications under the Internal Revenue Service’s Employee Plans Compliance Resolution System (EPCRS). EPCRS, which allows employers to correct qualification defects in the design and operation of their qualified retirement plans, has expanded significantly over the past several years. The expansion of EPCRS has made voluntary correction of qualified plan defects easier, less costly, and more palatable for employers. As a result, more and more employers are taking advantage of EPCRS, and our practice in this area has grown proportionately. Our experience with EPCRS enables our employee benefits lawyers to negotiate timely, efficient, and cost-effective sanctions and corrections of qualified plan defects on behalf of our clients. In addition, we assist clients in identifying areas of risk with a proactive approach to plan compliance.