By Paul D. Woodard, Esq. Contributing Author: Kristine M. Custodio, Advanced Certified Paralegal Following are the Department of Labors penalties as they relate to ERISA violations pursuant to the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2018, which became effe...
Many defense contractors are turning towards employee-ownership as a way take advantage of tax savings and reward employees by giving them a stake in the company they work for. Specifically, many defense contractors are utilizing employee stock ownership Plans (ESOPs) as a way to provide owners w...
Employers involved in an ERISA dispute can face a long road of litigation, and the time and expenses that go along with it. Many ERISA claims filed by former employees have a very low chance of success but that does not eliminate the need for the employer to put in the time and money to fight the...
The unemployment rate across the country remains low, dropping to 3.7% in San Diego County in October. This low unemployment rate has made it difficult for many employers to find the workers they need to keep their businesses growing. Employers who are unable to compete with higher salary offers ...
There are a number of benefits to setting up an employee retirement plan for both employers and employees. This includes the ability to attract top talent and incentivize current employees to stay with the company to maximize their benefits. However, one of the most compelling reasons employers s...
Some employers dread mediation because it is the first time they have to come face-to-face with a disgruntled employee. An employee may use this meeting as a chance to unload all of their complaints of how they were mistreated, rather than focus on the ultimate issue of a possible ERISA violation...
Many types of businesses are turning towards employee ownership as a succession planning tool and as a way to incentivize employees. Industries that can benefit from employee ownership plans include architecture and design firms, construction companies, and defense contractors, among others. Whil...
Employee Stock Ownership Plans (ESOP) provide a unique business ownership structure that allows employees to have a stake in the company they work for. ESOPs offer additional benefits for the overall success of the company, as well as for the owners selling shares in the company. Certain types of...
An Employee Stock Ownership Plan (ESOP) is a qualified defined contribution retirement plan that primarily invests in common company stock. These shares are held in an ESOP trust until the employee leaves the company or retires. At that point, the shares are bought back by the company. Many clos...
In general, Employee stock ownership plans (ESOPs) can be a benefit to owners, employees, and the company overall. ESOPs provide a unique way for employees to gain an ownership interest in their company and set aside retirement savings. However, ESOPs can also present some problems and complicati...
Department of Labor (DOL) investigations into fiduciary breaches in ESOPs can result in significant civil liability, penalties, and even possible criminal charges. The majority of these investigations are triggered by civil lawsuits, whistleblowers, or participant complaints, but a small handful ...
A 403(b) plan derives its name from the Internal Revenue Code (IRC) Section 403. 403(b) plans are generally only available for certain employees of public schools, employees of cooperative hospital service organizations, employees of 501(c)(3) organizations, and certain ministers. A 403(b) retire...
The proposed implementation of changes in the Best Interest Contract Exemption and fiduciary rules will be further delayed until January 1, 2019. Previously, the transition period extended from June 9, 2017, to January 1, 2018. According to the Department of Labor, the extended delay will give th...
Many businesses put a lot of time and effort into initially setting up company retirement plans. Unfortunately, they do not regularly revisit the plans to ensure they are staying in compliance with ERISA and federal regulations, or do not take into account governmental policy changes. A Departmen...
The IRS Voluntary Correction Program allows companies to correct mistakes with their retirement plan before they face an audit. Compliance can allow the plan to maintain tax-favored status and avoid costly penalties. The IRS has published the “Top Ten Failures Found in Voluntary Correction Progra...
When most plan participants think about security involving their retirement plan, they are typically thinking along the lines of financial security and how their investments perform. However, like other financial institutions, retirement accounts are subject to cyber threats that could threaten u...
In April of 2017, the ERISA Advisory Council on Employee Welfare and Pension Benefit Plans announced a review of ERISAs required disclosures and notices. The Council sought input from stakeholders on a number of topics, in part, to determine if current ERISA requirements should be amended or mod...
A 403(b) plan is named after the Internal Revenue Code (IRC) Section 403, which details the plan. Essentially, a 403(b) plan is a retirement plan that allows employees to make contributions on a pre-tax basis, similar to a 401(k) plan. 403(b) plans sponsored by governmental and public education e...
Check out my article published in the September/October 2017 edition of NALA's Facts & Findings magazine!
Many companies offer retirement benefit plans to their employees. However, standardized retirement benefit plans may not have the same appeal to executives as they would to regular employees. Executives are increasingly offered targeted retirement benefits that benefit both the company and the ex...
Dealing with complex federal regulations, like ERISA, is anything but simple. However, there are some important things for plan administrators, employers, and Plan Participants to know about when facing the possibility of ERISA litigation. When the potential for litigation over an ERISA plan aris...
Mediating ERISA disputes has unique challenges compared to mediating other types of civil claims. Some attorneys representing the employer use mediation as a way to flex their litigation muscle, coming down hard on the employee. However, mediation should be used as a way to resolve a complaint be...
Failure to Maintain Plan Documentation It is important for plan sponsors to have a general understanding of their fiduciary responsibilities to plan participants. These include making sure to avoid conflicts of interest, diversifying investments, and acting in the best interests of plan particip...
There are a number of benefits associated with employee stock ownership plans (ESOPs) for companies. In general, an ESOP can be a benefit to owners, employees, and the company overall. However, ESOPs can present some problems and complications. Understanding the potential pitfalls of an ESOP can ...
Acting as a fiduciary for a qualified retirement plan involves a number of important responsibilities. However, making even simple fiduciary decisions can have serious consequences. Failing to follow best practices may leave a fiduciary personally liable for losses to the plan and result in remov...