Employee Benefits, Executive Compensation & ERISA

PDF
Bowditch & Dewey provides legal counsel on employee benefits to for-profit and non-profit entities including manufacturers, hospitality institutions, health care providers, colleges and universities, museums, independent schools and social services agencies. Since ERISA became law in 1974, Bowditch & Dewey has maintained an active ERISA practice. Our lead ERISA attorney, Terrence J. Briggs, practices exclusively in the fields of ERISA/employee benefits and executive compensation.

Our attorneys understand the sensitive nature of benefits, executive compensation and ERISA matters, and work closely with clients’ finance and human resource leadership to take advantage of opportunities and to identify and solve current and potential problems. When a client of the firm faces a claim arising from a benefits or compensation dispute or a government audit, we attempt to resolve the issue through negotiation. In the event that litigation is unavoidable, we are committed to providing cost-efficient, responsive service while obtaining a favorable outcome.

Our specific benefits, executive compensation and ERISA services are outlined below:

  • Defined benefit plans: Defined benefit plans, the traditional lifetime pension that our parents earned for a lifetime of work, have become too costly to maintain for most businesses. We assist our clients in maintaining their plans when that is in their capacity and interest. If the time comes when a defined benefit plan cannot be sustained, we can help to revise the benefit schedule or even terminate the plan. In addition, we have established relationships with the US Department of Labor and the Pension Benefit Guarantee Corporation that allow us to find the most advantageous result for our clients within ERISA’s complicated regulatory structure.
  • Profit-Sharing, 401(k), and 403(b) plans: We advise many clients about the installation and maintenance of tax qualification requirements, benefit revision through amendments, and operation of their profit-sharing, 401(k), and 403(b) plans. We have assisted clients in correcting compliance problems through the IRS Employee Plans Compliance Resolution System, the DOL Voluntary Fiduciary Correction Program and Delinquent Filer Voluntary Compliance Program. We have worked on behalf of our clients in advocating for their positions with their plan auditors, the IRS, and the DOL.
  • Employee health and welfare plans: We provide routine guidance in installing and adjusting welfare benefit plans, adopting wrap plans to simplify Form 5500 reporting, COBRA compliance, and assistance in handling claims and claim appeals. We are regularly consulted by our clients with respect to matters involving employer-sponsored health insurance. We advise our clients through the labyrinth as the uncertainty around federal regulation of the health insurance market unfolds.
  • Executive compensation: We assist management in defining executive benefit packages, negotiations with executives and drafting final agreements for profit-making businesses and non-profits including colleges, private schools, and health care providers. We frequently work with the complexities of Code Sections 409A, 162(m), 280G, 457(b) and 457(f) to save our clients and their executives from unanticipated and expensive, but avoidable, tax outcomes. We have drafted nonqualified deferred compensation arrangements, including defined benefit and defined contribution SERPs, short and long-term incentive plans, omnibus stock and phantom stock plans, and employee stock purchase plans. We assist in the negotiation and implementation of executive severance arrangements.
  • Reduction in work force planning including early retirement offerings: We have worked with our clients to develop programs when workforce reductions are required and for early retirement incentive programs - including extended health insurance, nonqualified retirement benefits, and increased vesting and service credit for defined benefit plans. On behalf of our college and university clients, we have advised on the structure and operation of early retirement window programs.
  • Mergers and acquisitions: We assist our clients in the due diligence process. We work with counsel and human resource staff to integrate the merged or acquired entity’s employees into the purchaser’s benefit structure. This involves terminating the merged entity’s retirement plan or, less often, merging it into our client’s plan. We analyze the 409A implications of any executive compensation arrangements and assist in the negotiations for new employment contracts for incoming executives who would otherwise lose benefits.
  • Plan audits: We work closely with our clients to prepare for a benefit plan audit by either an independent auditor engaged by the plan or a governmental auditor. We seek to identify and correct any issues that might prohibit a clean audit report. If the auditor identifies a problem, we advise on the appropriate correction. We have deep experience working with IRS and DOL correction programs. Our relationships with these agencies allow us to get helpful guidance on particularly difficult issues.


Representative Experience

  • Advised on, drafted, and saw to the adoption and installation of a deferred compensation arrangements under Code sections 457(b) and (f) for the long-time head of an independent school in North Carolina.
  • Negotiated and drafted an employment agreement with highly complex issues related to current and deferred compensation, stock purchases and grants, supplemental life and disability insurance, conditions under which severance payments would be made upon certain terminations of employment, and confidentiality and non-disclosure rules for the CEO of a business that was wholly-owned by a person with a reputation for getting into disputes and firing the company’s executives.
  • Gathered data for, drafted, and submitted successful applications for relief under the IRS Employee Plans Compliance Resolution System for errors involving retirement plan operations relating to eligibility, vesting, definition of compensation, and plan contributions.
  • Submitted Voluntary Fiduciary Compliance Program applications for late forwarding of plan contributions.
  • Led planning and preparation prior to the independent audit of a retirement plan.
  • Analyzed and defended against claim by the Pension Benefit Guaranty Corporation that the sponsor of a pension plan was a member of a controlled group of corporations which would have required contributions to the plan by the group members.
  • Reviewed and advised on service agreements from providers of retirement and welfare benefit plan services.
  • Designed and drafted an early retirement window program for a college that was seeking to encourage the retirement of faculty members in disciplines with declining enrollments in order to create new positions in fields where student interest was higher.
  • Advised on the fiduciary responsibilities of a college retirement plan’s investment advisory committee.
  • Interpreted the COBRA rules related to the effect of Medicare entitlement on COBRA eligibility.
  • Assisted counsel for a divorcing employee with a QDRO for our client’s defined benefit pension plan.
  • Assisted a client to develop a compliant set of health plan documents to satisfy the requirement for a Summary Plan Description.
  • Advised on and assisted in the merger of the 401(k) plan of a newly acquired entity into the 401(k) plan of a client.