Qualified Retirement Plans
Qualified plans are funded retirement arrangements covering a broad group of employees. The sponsoring employer receives an immediate tax deduction when contributions are made to the plan. Participants accumulate benefits on a tax-deferred basis until benefits are received, normally after retirement or other termination of employment. Plan funds are invested on a tax-deferred basis pending distribution as benefits to participants.
Qualified plans include pension, profit sharing and stock bonus plans. These include plans with employer-provided benefits for eligible employees and self-employed persons and elective plans (401(k) plans) that allow participants to make pretax elective contributions out of their own pay, as well as employee stock ownership plans (ESOPs) that invest in stock of the sponsoring employer.
To be tax-qualified, a retirement plan must be designed and documented in compliance with IRS requirements. A host of additional requirements must be met under the Employee Retirement Income Security Act of 1974 (ERISA). These requirements include design and documentation rules, fiduciary standards, mandatory reporting to the IRS and the Department of Labor, and mandatory disclosure to participants and beneficiaries.
We help clients with all aspects of installation of qualified retirement plans, including design, drafting, preparation of corporate documents, obtaining IRS approval, communication with employees and establishing reporting procedures. We work directly with the client, often in cooperation with the client's other consultants, such as actuaries, accountants, investment advisors, commercial trustees or insurance companies.
After the plan is established, we provide ongoing advice on plan administration and interpretation and on continued compliance with rules affecting management of the plan and its assets. We also advise on tax and estate planning considerations for plan distributions.
Health Benefits and Other Employee Welfare Benefits
Arrangements other than qualified plans can also provide tax-favored benefits, either during employment or after termination of employment. Such benefits include medical and dental benefit plans, group term life insurance plans, cafeteria plans, education assistance plans, dependent care assistance plans, other fringe benefit arrangements and welfare benefit trusts. These arrangements are also subject to many requirements under the Internal Revenue Code and ERISA.
As limitations on qualified plan benefits have become more restrictive over time, it has become increasingly important to arrange supplementary benefit programs to attract and retain key executives. We work with a wide range of clients, from start-up companies to publicly owned companies, to design and document executive deferred compensation plans, supplementary retirement plans and performance-based incentive compensation plans.
Other Employee Benefits
We help clients design and implement a wide range of employee benefit programs, including Simplified Employee Pension Plans (SEP-IRAs), individual retirement arrangements, tax-sheltered annuity programs, severance pay arrangements, cash bonus programs and other broad-based incentive compensation plans.
Membership and Clients
Firm attorneys practicing in this area are active members of the Western Pension and Benefits Conference and other professional organizations serving the employee benefits community, including the Association of Private Pension and Welfare Plans, the International Foundation of Employee Benefit Plans and the ESOP Association.
Clients for whom we handle significant responsibilities include large employers or groups of employers; small- to medium-sized employers; large and small professional corporations and partnerships of professional corporations; multiemployer pension and welfare plans; association pension and welfare plans; prototype plans; for-profit, nonprofit, and governmental employers; partnerships; and individuals.