SubscribeThe Federal Civil Penalties Inflation Adjustment Act of 2015 directs the US Department of Labor (DOL) to make annual inflation adjustments to specified Employee Retirement Income Security Act (ERISA) violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2022, and if the violation occurred after November 2, 2015.
Employee Stock Ownership Plans
US Supreme Court to Review Unusual Second Circuit Decision in Stock Drop Case Against IBM
On Monday, the US Supreme Court agreed to review the Second Circuit’s decision in Jander v. Retirement Plans Committee of IBM, a “stock drop” lawsuit against IBM’s benefit plan fiduciaries. The Second Circuit’s decision marked one of the few times a federal court permitted a “stock drop” lawsuit to survive dismissal since the Supreme Court’s decisions in Fifth Third Bank v. Dudenhoeffer (2012) and Harris v. Amgen (2016). (more…)
Staying Out of Trouble: How to Avoid IRS and DOL Audits
The Internal Revenue Service (IRS) and the Department of Labor (DOL) conduct different types of benefit plan audits, such as retirement plans and health and welfare plans, and for various reasons. In a presentation, Jeffrey Holdvogt and Maggie McTigue discuss IRS and DOL audit triggers, the process for each and what to do if your plan is audited. They also discuss the top audit issues and actionable steps companies can take to avoid audits and compliance issues.
ESOP Trends in the Marketplace
Over the years, employee stock ownership plans (ESOP) have evolved in many ways. Currently, ESOP transactions began to resemble traditional M&A transactions including financial structures, warrants and market rate sub-debt. In a recent presentation at the NCEO Employee Ownership Conference, Allison Wilkerson discusses current marketplace trends in structuring ESOP transactions, including the importance of pre-transaction structure analysis and post-transaction planning. Allison also goes over the beneficial tax planning opportunities associated with ESOP transactions.
Advantages of Using ESOPs To Structure Acquisitions and Divestitures In An Uncertain Economy
M&A advisors are becoming increasingly familiar with leveraged ESOP transactions and are routinely considering the ESOP platform in structuring acquisitions and divestitures. The first part of this article references the ways in which leveraged ESOPs have historically been used to provide a tax-advantaged exit strategy for privately held business owners. The article then discusses the advantages the leveraged ESOP structure can bring to M&A advisors and private equity groups charged with structuring acquisitions and divestitures during a down economy.
The Moench Presumption: An Examination of the Third Circuit’s Standard of Prudence in Employer Stock Cases and Its Subsequent Treatment by Circuit Courts
by Nancy G. Ross and Prashant Kolluri
This article, which appeared in Benefits Law Journal, discusses the standard of prudence formulated by the Third Circuit for employer stock cases brought under the Employee Retirement Income Security Act of 1974 (ERISA) and the Circuit Courts’ subsequent treatment of that standard. Although a number of Circuit Courts have adopted the Moench presumption of prudence, there is still significant disagreement over the procedural stage at which the presumption applies and how the presumption can be rebutted. Given this split between the courts, judicial intervention by the US Supreme Court is necessary to resolve these outstanding issues and fulfill Congress’s goal of attaining uniformity of benefits regulation.
To read the full article, click here.
