Section Newsletters

Articles on Employee Benefits

Governor signs Pension Reform Bill By Michael J. Hernandez Education Law, June 2005 The Governor has signed Senate Bill 27 into law. Among other things, SB 27 extends the teachers' Early Retirement Option (ERO).
Impact of bankruptcy reform legislation on qualified retirement savings plan exclusions/exemptions By Mark A. Bogdanowicz Employee Benefits, June 2005 This is an overview of the state of the law as to exemptions covering employee benefits under the Bankruptcy Code of 1978 and how these provisions will be affected under the recent bankruptcy reform legislation, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCA").1
Recent developments clarify treatment of retirement assets in bankruptcy, but some questions remain By Scott E. Galbreath Corporate Law Departments, June 2005 For years the states and bankruptcy courts have struggled with questions regarding the treatment of retirement assets held in qualified plans or individual retirement accounts ("IRAs") under the bankruptcy laws.
IRS proposes regulations on designated Roth contributions to 401(k) plans By Alec Dike & Francis Grealy Corporate Law Departments, May 2005 The IRS has issued proposed amendments to the 401(k) and (m) regulations that would provide guidance on designated Roth contributions under Internal Revenue Code Section 402A, added by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).
Automatic rollover rules By Richard F. Skweres Employee Benefits, March 2005 Many retirement plans have rules that provide for automatic distributions to terminated participants or beneficiaries when the benefits are less than $5,000.
Employee benefits update By Thomas Vasiljevich & Elizabeth A. Ward Federal Taxation, March 2005 On October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004 ("AJCA") which added Section 409A to the Internal Revenue Code of 1986, as amended, (the "Code").
Federal caselaw update By David R. Shannon Employee Benefits, March 2005 "Sandbagging": LTD claimant was not provided access to independent medical examiner's report, which served as basis of denial of benefits, until after plan's decision.
Interpreting the IRS guidance issued under Code Section 409A affecting nonqualified deferred compensation plans By Mary Samsa, Joyce Meyer, & Dave Wolfe Employee Benefits, March 2005 With the release of IRS Notice 2005-1, nonqualified deferred compensation plan sponsors have the first set of guidance regarding amendments needed to comply with new Code Section 409A.
IRS issues guidance on new nonqualified deferred compensation rules By J. Paul Jacobson Corporate Law Departments, January 2005 On December 20, 2004, the IRS released Notice 2005-1, containing guidance on new Internal Revenue Code Section 409A, which accelerates income taxation and imposes penalty taxes on individuals covered by deferred compensation plans that do not comply with its requirements.
Federal caselaw update By David R. Shannon Employee Benefits, December 2004 Six weeks after taking early retirement, and after he had been assured by his employer that there would be no special separation packages offered to departing employees, ComEd offered a special separation package to certain employees.
Health Savings Accounts (HSAs) under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 By Brian W. Ruddell Business and Securities Law, December 2004 Section 1201 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 added Section 223 to the Internal Revenue Code to permit eligible individuals to establish Health Savings Accounts (HSAs) for taxable years beginning in 2004.
New rules ahead for nonqualified plans By Ann Marie Breheny Corporate Law Departments, December 2004 President Bush signed the American Jobs Creation Act (H.R.4520) into law on October 22, 2004.
Recap of 2004 guidance on Health Savings Accounts By Jennifer Walton Employee Benefits, December 2004 Health Savings Accounts (HSAs) were created in the Medicare bill signed on December 8, 2002 by President Bush and outlined in his State of the Union speech.
Significant changes ahead for deferred compensation plans: An overview of the deferred compensation provisions under the American Jobs Creation Act of 2004 Employee Benefits, December 2004 President Bush recently signed into law new legislation that will substantially affect all nonqualified deferred compensation plans and employment agreements that include deferral arrangements, and may also affect other forms of compensation.
Garnishments of participant’s account in ERISA qualified plan to collect a federal criminal fine is not prohibited by the anti-alienation provision By Leasa J. Baugher Employee Benefits, September 2004 On July 23, 2003, the Internal Revenue Service issued a private letter ruling deciding that a court order permitting the garnishment of the individual's 401(k) plan account balance to satisfy the individual's fine in a criminal case would not violate IRC § 401(a)(13).
Supreme Court finds that HMO employee benefit plan eligibility decisions are governed by ERISA and therefore not subject to claims under state health care liability laws By William L. Scogland & Galen Mason Employee Benefits, September 2004 In Aetna Health Inc. v. Davila and CIGNA Health Care, Inc. v. Calad, the Supreme Court ruled that patients cannot use state health care liability laws to sue health maintenance organizations (HMOs) for claims relating to an HMO's interpretation of an employer-provided benefit plan.
Supreme Court limits remedies available to managed care plan participants By Anthony E. Antognoli Young Lawyers Division, August 2004 In a unanimous decision, the Supreme Court of the United States recently ruled that participants in managed care health plans, such as Health Maintenance Organizations ("HMOs"), may not sue their plans in state court for injuries they allege to have been caused by a plan's negligence in handling coverage decisions.
Federal Legislative Report-May 31, 2004 Employee Benefits, June 2004 Allows the U.S. Department of Defense to pay the COBRA premiums of certain military reservists called to active duty, and their dependents.
Health Savings Accounts: Are they ERISA-covered plans? By Raelene LaPlante Employee Benefits, June 2004 New federal legislation offers potential benefits to both individuals and employers in the form of health savings accounts ("HSAs").
The mutual fund scandals and your retirement plans By Ned Othman Employee Benefits, June 2004 Daily news reports headline that federal and state law enforcement officials, including New York Attorney General Eliot Spitzer, are investigating trading practices at a number of the nation's leading mutual fund companies.
Postmortem QDROs-May benefits be divided after death? By William L. Scogland & Mark A. Berggen Employee Benefits, June 2004 Issues regarding the qualification of postmortem domestic relations orders ("DROs") continue to exist as a unified approach among the United States Circuit Courts of Appeals has yet to be made clear to benefit law practitioners.
QDRO processing costs can be allocated to individual accounts By Michael Todd Scott Employee Benefits, June 2004 On May 19, 2003, the Department of Labor (DOL) issued Field Assistance Bulletin 2003-3 to address the allocation of certain defined contribution plan expenses among participant accounts.
International Union of United Auto., Aerospace and Agric. Implement Workers of America v. Rockford Powertrain, Inc.: The Seventh Circuit determines that “lifetime” welfare benefits to retirees are subject to termination under a reservation of right By Greg Madden Employee Benefits, May 2004 Seventh Circuit issued its decision in International Union of United Auto., Aerospace and Agric. Implement Workers of America v. Rockford Powertrain, Inc., 350 F.3d 698 (7th Cir. 2003), in which the Seventh Circuit addressed whether a district court erred in granting summary judgment in favor of an employer on the issue of whether the employer was contractually obligated to maintain retirement benefits for the life of its retirees and their surviving spouses.
Noisy withdrawal and its implications for the employee benefits lawyer By Julie A. Govreau Employee Benefits, May 2004 In response to the scandals that shook the foundations of the corporate world and severely compromised public confidence in the private sector, Congress in 2002 passed The American Competitiveness and Corporate Accountability Act of 2002, better known as the Sarbanes-Oxley Act.
Retirement plans, insurance and taxes Business Advice and Financial Planning, May 2004 Publisher's note: In response to "The 70-80 percent tax trap: How to help clients avoid the double taxation of money in their qualified plan or IRA," which appeared in the last issue of The Counselor, a reader noted that the IRS has since issued guidance to shut down what it considers "abusive transactions" involving specially designed life insurance polices in retirement plans (so-called "section 412(i) plans").
Summary of recent federal cases By Teresa Faherty Blomquist Employee Benefits, May 2004 1. ADEA gives age discrimination reprieve. Follow-up to Erie County Retirees Association v. Erie County, 3d Cir., No. 99-3877, 8/1/00.
International stock ownership as a benefits strategy By Randy L. Gegelman & Amy Seidel Corporate Law Departments, February 2004 A significant number of multinational corporations have implemented broad-based stock ownership arrangements extending to their foreign employees.
Rev. Proc. 2003-44: A brand new tomorrow for correcting disqualifying failures* By Kathryn J. Kennedy Employee Benefits, February 2004 The Service's recently released Rev. Proc. 2003-44 is a welcome addition for employee benefits practitioners and for plan sponsors of qualified retirement and profit-sharing plans.
The mutual fund scandals and your retirement plans By Ned Othman Corporate Law Departments, January 2004 Daily news reports headline that federal and state law enforcement officials, including New York Attorney General Eliot Spitzer, are investigating trading practices at a number of the nation's leading mutual fund companies.
Rev. Proc. 2003-44: A brand new tomorrow for correcting disqualifying failures* By Kathryn J. Kennedy Employee Benefits, January 2004 The Service's recently released Rev. Proc. 2003-44 is a welcome addition for employee benefits practitioners and for plan sponsors of qualified retirement and profit sharing plans.

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