Under Internal Revenue Service (IRS) rules, a distribution from an eligible retirement plan of a deceased employee made to a designated beneficiary may be treated as an eligible rollover. A non-designated beneficiary, generally, cannot get the benefits of a rollover. However, in a Private Lette...
Although settlement agreements are not legal precedent, they do provide guidance on the Department of Labor's (DOL's) position and its interpretation of applicable laws, and can thus help fiduciaries make changes now to avoid potential liability in the future. A number of recent settlement agre...
Under the Employee Retirement Income Security Act of 1974 (ERISA), retirement plan sponsors have a fiduciary duty that requires them to act solely in the interest of plan participants and beneficiaries. Plan sponsors are also limited to using plan assets for the reasonable expenses of adminis...
The Internal Revenue Service (IRS) requires that pre-approved qualified employee retirement plan documents be restated every 6-years to stay compliant as pre-approved plans. When plan sponsors miss the pre-approval deadlines, they risk losing qualified status, which could result in employees ...
Do you have the financial security to be able to one day retire from your small business? Many small business owners are so focused on growing their business that they do not take the time to focus on what will happen when they are finally ready to retire. However, there are options available f...
The Employee Retirement Income Security Act (ERISA) is a complex and continually changing federal law that applies to most private sector employee benefit plans. When companies unintentionally run afoul of ERISA regulations it can expose them to fines, penalties, and costly litigation. Unders...
A former plan administrator and trustee of a lighting company's pension plan has been ordered to pay more than $1.6 million in restitution. The former owner of North Carolina's House of Lights was found to be issuing prohibited payments from the company's profit-sharing plan. An investigation ...
Under ERISA, those who administer, manage, or control plan assets have a fiduciary duty to plan participants. One of the many fiduciary duties of plan sponsors is to provide disclosures to plan participants, including a summary of material modifications (SMM), annual reports, and notice of an...
In a claim for disability benefits under ERISA, the court granted the plaintiff's motion for attorneys' fees and denied the defendant's request for attorneys' fees despite the defendant's success on the merits. Olga Gorbacheva filed an ERISA lawsuit after her employer, Abbott Laboratories, den...
Under ERISA, those who administer, manage, or control plan assets have a fiduciary duty to plan participants. This fiduciary duty requires them to act solely in the interest of plan participants and beneficiaries. It is important for plan fiduciaries to understand their roles and responsibiliti...
An Employee Stock Ownership Plans (ESOPs) become more popular in the U.S., employee ownership legislation is making its way through Congress to broaden the appeal of these unique benefit plans. Two bills, one in the House and one in the Senate, have recently made it through the Small Business Com...
It has generally been the Department of Labors (DOLs) position that certain fiduciary indemnification agreements in ESOPs are void as against public policy. There is no clear legal precedent on the issue of how far indemnification agreements can go before they become invalid. However, recent ES...
In a Union-Tribune article, San Diego was listed as number 2 in employment in active lifestyle-oriented businesses in the country. There are now more than 1,200 such companies in the area employing more than 23,000, making an economic impact of over $1.4 billion. Some of these sporting and lifest...
Southern California business owners in the specialty food industry know how difficult it can be to succeed in the ever-changing and competitive market. One of the greatest assets any business can have is a dedicated group of employees committed to the continued growth of the company. To both fost...
Like many types of insurance, you may go years paying for premiums and never need to take advantage of the coverage. When insurance is not mandatory, deciding whether to purchase a policy may depend on weighing the costs and benefits. However, when fiduciary liability associated with your company...
Employee-owned companies have shown increased productivity and performance, according to recent surveys. However, employee-ownership is also associated with higher rates of employee retention. Some companies undervalue the cost-savings of higher employee retention rates when considering whether t...
ANSWER: The San Diego area is renowned as the headquarters of more than 150 breweries, earning it the nickname of the “Craft Beer Capitol” of the U.S. However, while many brewery owners can explain the nuances of lautering and even wax poetic about fermentation techniques, they may feel out of th...
Employee ownership is associated with tax savings, increased production, and higher employee retention rates. However, employee ownership is not always the best fit for some companies. Business owners should be prepared for the possibility that they may have to freeze or terminate an ESOP and rev...
Many business owners are still relatively unfamiliar with ESOPs. As the number of Employee Stock Ownership Programs continue to grow, companies are looking into the benefits of an ESOP. An Employee Stock Ownership Plan (ESOP) is a profit sharing plan structured as a qualified defined contributio...
After spending a lifetime building your company, it can be difficult to consider retirement. It is not easy to hand off your company to a new generation out of concern that the new owners do not have the same dedication to the company you built from scratch. For many business owners, an ESOP prov...
One of the important benefits to companies in establishing a retirement plan for its employees is the tax-favored status granted to a 401(k), 403(b), SEP, or SIMPLE IRA. This includes deducting employer contributions to such employee plans. However, in order to maintain tax-favored status, the pl...
Many companies eyeing the benefits of an ESOP are waiting to see how the new tax law changes will affect the tax benefits of employee ownership. However, it appears that the tax benefits associated with an ESOP will continue and even expand into the future. S corporations may soon get some of the...
The U.S. Department of Labor has announced new rules amending the claims procedures for disability benefit plans will go into effect April 1, 2018. According to the DOL, this new rule change will “give Americas workers new procedural protections when dealing with plan fiduciaries and insurance p...
For anyone watching the latest in Employee Stock Ownership Plans (ESOP), there has been a lot of legislative action taking place at the federal and state level in recent months. Politicians on both sides have been promoting ESOPs as a way to increase economic growth and opportunity for employees ...
The National Taxpayer Advocate (NTA) is an independent organization within the IRS that was established to ensure fair treatment for taxpayers and help taxpayers understand their rights. The NTAs inaugural edition of the Purple Book contains recommendations for tax law and policy to “strengthen ...