Employee Benefits and Executive Compensation knowledge has become increasingly important to employers seeking to succeed in attracting talented employees in a competitive marketplace, while meeting the challenges of increasingly complex employee benefits laws and regulations. Public corporations, private companies, trust companies, non-profit organizations and religious groups must adapt their policies on a regular basis to address new rules and regulations and a constant stream of legislation. And with the financial scandals of recent years putting executive salaries in the spotlight, they must draft compensation plans and agreements that withstand increased scrutiny.
At Patterson Belknap, lawyers with decades of experience working in the for-profit and not-for-profit worlds handle a variety of compensation and benefits design and compliance issues, such as designing and updating retirement plans to reflect recent legislation, drafting and revising executive compensation and equity-based compensation arrangements to reflect new Internal Revenue Code limitations on deferred compensation and changing corporate governance and accounting standards, and designing welfare benefits arrangements that comply with changing rules. We aid in all aspects of Plan administration, including the review of disputed claims and the handling of QDROs. We advise with regard to fiduciary issues, including the investment of plan assets, the design of and negotiations of documentation governing plan investment vehicles, the review and negotiation of investment manager agreements and advice regarding participant directed investments, including the special rules regarding employer stock investments and blackout restrictions. We address the employee benefits and executive compensation issues inherent in mergers and acquisitions, securities filings and reductions-in-force. Our work with employee benefits and executive compensation has earned us recognition in industry publications such as U.S. News / Best Lawyers® survey of "Best Law Firms.”
Up-To-Date Advice in Changing Times
Helping clients address the issues of the day, we advise on benefits for Americans working abroad, counsel employers and design cash-balance arrangements, advise and draft provisions related to the impact of domestic partnerships and same-sex marriages on retirement and welfare benefit plans, and advise on HIPAA privacy rules. We promote our clients' interests before the IRS, the Department of Labor and the Pension Benefit Guaranty Corporation (PBGC). And we keep clients up-to-date on the latest laws by holding private in-house seminars, speaking before industry groups and writing articles for publication.
For our clients, our lawyers have:
- Prepared prospectuses for 401(k) plans with investment in employer securities.
- Obtained prohibited transaction exemptions.
- Successfully defended in fiduciary litigations.
- Successfully negotiated with the PBGC to limit a client’s liability.
- Guided plans through series of regulatory audits from multiple government agencies.
- Advised on the correction of operational errors, including negotiating and obtaining IRS approval, where appropriate.
- Designed investment vehicles for pension plan investment.
- Negotiated investment management agreements, and advised fiduciaries on opening and closing investment funds and related fiduciary issues.
- Reviewed benefit and compensation plans for compliance with tax and employee benefits law, while achieving employer goals.
- Designed and revised benefit, incentive and deferred compensation plans and arrangements for compliance with tax and ERISA requirements, including the new deferred compensation rules under Internal Revenue Code §409A, while achieving employer goals.
- Negotiated and drafted employment and consulting agreements, and change in control agreements, and modified such agreements and related arrangements in light of new Code §409A requirements.
- Structured compensation arrangements to minimize the impact of the Internal Revenue Code §162(m) limitations on deductible compensation and the §280G "golden parachute" rules arising in change of control situations.
- Designed and drafted programs providing for equity compensation, including options, restricted stock, deferred stock, stock appreciation rights and other phantom arrangements.
- Designed and obtained approval for VEBAs, and advised on their utilization.
- Run substantial benefits and compensation due diligence in connection with mergers and acquisitions.
- Drafted employee communications materials.
Understanding the Needs of Not-for-Profit Organizations
Although not-for-profit organizations and religious groups deal with many of the same problems as their for-profit counterparts, the solutions often need to be dramatically different. These groups are subject to special, often more restrictive, rules about such issues as the structure of non-qualified deferred compensation arrangements and other tax-favored retirement arrangements. Because we have experience gained from working with a wide variety of not-for-profits and church pension plans over the years, clients regularly call upon us to analyze benefit and pension plans and to design arrangements that remain in compliance with the law. We are also actively involved in advising on the reasonable compensation standards imposed on not-for-profits, whether under the “intermediate sanctions” rules or other applicable regulations.
Areas of Concentration
Employee Stock Ownership Plans
Multiple Employer Plans
Plan Design, Implementation and Termination