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Recent Blog Posts

  • Tie goes to the plan administrator: Sixth Circuit clarifies importance of Firestone language for ERISA plan interpretation By Greg Daugherty and Seth Hanft    In baseball, there is a common saying that a “tie goes to the runner.” Under this maxim, if a base runner and the baseball arrive at the base at the same time, the runner is safe. Stated another way, the baseball must arrive at the base before the runner in order for the runner to be out. The rule, essentially, construes close calls against the defense. Yet, many Major League Baseball umpires interpret the rule... More
  • IRS provides guidance to 403(b) plan sponsors who can’t locate participants required to receive distributions (but be mindful of DOL rules too) By Greg Daugherty and Seth Hanft    The IRS’s Tax Exempt and Government Entities Division recently issued a memorandum (the memo) to its auditors that directed them not to challenge a 403(b) plan as failing to satisfy the required minimum distribution (RMD) standards under circumstances set out in the memo. This guidance is helpful to 403(b) plan sponsors and consistent with missing participant procedures that the IRS set forth for qualified plan sponsors last year. For those 403(b) plans that are governed... More
  • Tax reform will affect public company executive compensation arrangements and related proxy statement disclosures By Greg Daugherty and Dave Tumen    While opinions on the Tax Cuts and Jobs Act vary, one thing everyone can agree on is that it is a game changer in many areas of law and business. We explain this change and outline what it could mean for public companies in our recent post over at our firm’s Banking & Finance Law Report blog. Click here to read the full article: Tax reform will affect public company executive compensation arrangements and related proxy statement... More
  • Department of Labor continues to watch ESOP valuations with recent trustee settlements By Greg Daugherty    In recent years, the Department of Labor (DOL) has had a laser-like focus on valuation issues when privately held companies establish employee stock ownership plans (ESOP). In particular, the DOL is concerned with valuations that rely upon unrealistic growth projections, which lead to the ESOP paying too much (in the DOL’s view) for the shares of employer stock. The DOL has raised this issue in litigation, and in 2014, it entered into a settlement agreement with GreatBanc Trust... More
  • House and Senate have their sights on deferred compensation in proposed tax bills By Greg Daugherty and Dave Tumen    A week after telling everyone to “relax” about the proposed executive compensation changes in the Tax Cuts and Jobs Act, we have to admit that we have been watching anxiously as the proposed bills move through the legislative process. The executive compensation items that we discussed last week  have experienced quite a journey in the past week, with the House Ways and Means Committee making some welcome changes and the Senate Finance Committee introducing its... More
  • Proposed tax bill would make big changes to (and create new opportunities for) executive compensation By Greg Daugherty and Dave Tumen    Three games into the 2014 National Football League season, the Green Bay Packers had a 1-2 record. Fans were panicking. Many were questioning whether the Packers and its quarterback, Aaron Rodgers, were doomed to have a bad season. Rodgers responded with a simple message for fans: “R-E-L-A-X”. The Packers redoubled their efforts and made the playoffs that year, showing that the initial panic was rather silly. A similar scenario could be playing out with respect... More
  • Are the ERISA disability claims procedure regulations going to be delayed? How qualified and nonqualified plan sponsors should respond to the latest guidance By Greg Daugherty and Seth Hanft    While the fiduciary rule has received most of the attention in the world of ERISA as of late, a lesser known regulation that was finalized late last year also may require action by plan sponsors. This regulation , issued by the Department of Labor (DOL) in December 2016, requires applicable plans to satisfy additional procedural and notice requirements for disability claims. As a result, disability claims procedures will become more aligned with the claims and... More
  • The “final” countdown: DOL fiduciary rule still applies June 9, 2017 By Greg Daugherty    Much has been written to speculate what may become of the Department of Labor’s (DOL) fiduciary rule. Recently, the DOL issued a FAQ confirming that the new fiduciary rule will become effective June 9, 2017. Transition exemptions that were previously announced also will go into effect on that date. The DOL also issued non-enforcement guidance that should help mitigate the risk of litigation against fiduciaries who make a good faith attempt to comply with the new rule and... More
  • Will the DOL continue to make ESOPs a compliance priority? By Greg Daugherty    One question that has been on the minds of plan sponsors is how aggressive the Department of Labor (DOL) under President Trump will be compared to that of President Obama. In recent years, the DOL made a priority of investigating ERISA fiduciary issues, with a particular focus on employee stock ownership plans (ESOPs). After the DOL delayed the effective date of the ERISA fiduciary rule, some commentators speculated as to whether the DOL would scale back its priority... More
  • Hurry up and wait: ERISA fiduciary rule delayed By Seth Hanft and Greg Daugherty    While it took longer than many expected, the Department of Labor (DOL) issued a proposed rule that would provide a 60-day delay to the application of the new fiduciary rule and related prohibited transaction exemptions. As we reported in our previous blog, the rule was set to impose new fiduciary obligations on those who provide participant investment advice, which would have a trickle-down effect on the sponsors of qualified retirement plans in which those individuals... More