Our group holds bi-monthly conference calls open to all interested members of the RPTE section, as well as special "Study Group" calls to discuss current/breaking issues of interest. The calls generally are held at 1:00 pm ET on the first Friday of every other odd month. The schedule for 2014-2015 is below. Please join us!
EXCEPT AS NOTED, THE CALL-IN NUMBER FOR ALL CALLS IS: 1-866-646-6488 (THE PASSCODE MAY CHANGE FOR EACH CALL AND BE ANNOUNCED SEPARATELY). PARTICIPATION IN THE CONFERENCE CALL IS COMPLIMENTARY (NO CHARGE) FOR RPTE MEMBERS
Please join the RPTE Employee Benefit Plans and Other Compensation Arrangements Group for a conference call led by the IRA/Plan Distributions Committee on September 11, 2015 at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific) for a discussion of Qualified Domestic Relations Orders After Death and Other Topics of Interest As Described Below
Please email email@example.com for call-in information.
The Second Circuit recently held that two posthumous, retroactive domestic relations orders constituted valid qualified domestic relations orders (QDROs). The state court issued the orders to the deceased participant’s former spouse and made them retroactive to the earlier divorce settlement date, in part, due to the participant’s refusal to comply with the terms of that prior settlement agreement. The surviving spouse did not succeed to the participant’s benefits upon the participant’s death.
This opinion brings attention to the importance of alerting participants about the potential consequences of QDROs, requiring timely beneficiary designations, and confirming/realigning participant expectations regarding the tax consequences of various types of IRA and qualified plan distributions.
This teleconference will discuss:
• Department of Labor Regulations section 2530.206 (time and order of issuance of domestic relations orders);
• Yale-New Haven Hospital v. Nicholls, 788 F.3d 79 (2d Cir. 2015);
• Best practices for qualified plan beneficiary designations;
• IRA prohibited transactions under Code sections 408(e)(2) and 4975;
• Net unrealized appreciation (NUA) rules, under Code section 402(e)(4), for plan distributions consisting of employer securities;
• IRA minimum required distributions;
• Hardship withdrawal and loan processing; and
• IRS Notice 2015-49 (Use of Lump Sum Payments to Replace Lifetime Income Being Received by Retirees Under Defined Benefit Pension Plans).
The conference line will be open during the call, so please feel free to share your views and experiences. We ask that you send specific questions in advance of the call. Marc Purintun, Christina Crockett, and Henry Talavera, the IRAs and Plan Distributions Committee leaders, will facilitate the call.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by the Qualified Plans Committee on July 10, 2015 at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific) for a discussion of the Future of the IRS Determination Letter Program. The IRS recently issued Rev. Proc. 2015-36, opening the pre-approved plan program for opinion and advisory letters on Employee Stock Ownership Plans and defined benefit plans with cash balance features. The IRS was anticipated to issue a notice outlining the proposed reduction in the individually designed plan determination letter program, and requesting public comments.
This teleconference included a discussion of:
• The determination letter program modification proposal.
• General problems for individually designed qualified plans and their participants.
• Particular problem areas, such as multiemployer plans, government and church plans, for which there is no pre-approved plan program.
• The need for exceptions, delayed effective dates, and relief from section 411(d)(6) or other rules that make it difficult for some plans to fit within a preapproved plan format.
• Ideas for salvaging at least part of the current determination letter program.
• The role of benefits attorneys in a post-determination letter world.
The call was led by Karen Suhre, Tom Farnam and Bonita Hatchett of the Qualified Plans Committee.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by the Nonqualified Deferred Compensation Committee on Friday May 8 at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific) where we discussed Section 409A defects and possible corrections.
The final regulations under Section 409A of the Internal Revenue Code (“Section 409A”) were effective January 1, 2009. More than five years later, practitioners continue to struggle with differing interpretations of the regulations, finding Section 409A violations in many different places, and determining the most appropriate method to correct these violations. This teleconference included a discussion of the following issues.
● Common Section 409A pitfalls based on our collective experiences in the trenches
● How Section 409A errors come to light, including self-reporting obligations
● Addressing Section 409A errors in corporate transactions
● Advantages and disadvantages of possible strategies for responding to common Section 409A errors, including:
○ The Internal Revenue Service Section 409A correction program
○ The proposed Section 409A income inclusion regulations for amounts that are subject to a substantial risk of forfeiture
○ Taking the position that Section 409A does not apply because there is no “legally binding right” or the “short term deferral exemption” applies or prior to the occurrence of a “substantial risk of forfeiture”
○ Use of common law theories, including the rescission doctrine or the “Couch-Russel” doctrine
● Experiences with Internal Revenue Service audits
Our call was led by Stephanie Schroepfer, Doreen Lilienfield and Courtney M. Vomund; Nonqualified Deferred Compensation Committee Chair and Co-Vice Chairs.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by Fiduciary Responsibility, Administration and Litigation Committee on Wednesday, April 29, for a discussion of the recently released DOL’s proposed conflict-of-interest regulations, including the expanded definition of “investment advice,” the prohibited transaction exemption for “best interest contracts.”
The proposed rule expands the areas of advice that are rendered by ERISA fiduciaries and covers most significantly investment recommendations, investment management recommendations and recommendations of parties who provide advice for a fee or manage plan assets.
There are a number of specific and important carve-outs to the new rule generally intended to address the concerns expressed by the business and financial communities as well as those expressed by a number of members of Congress.
The call was led by Chuck Thulin, Lisa Van Fleet & Lori Oliphant of that committee.
A short bullet-point topics paper will be circulated shortly before the call, and posted to the Committee’s website.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by Fiduciary Responsibility, Administration, and Litigation Committee on Thursday, April 2, at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific) for a discussion of fiduciary issues related to breaches of health information.
The recent data breach announcements by high profile health plan vendors and insurers present a quagmire of legal and operational challenges for health plan fiduciaries and health plans. This discussion will explore challenges for plan fiduciaries, administrators and sponsors and will include a discussion of the following issues.
• Who is the fiduciary with responsibility over these matters
• ERISA fiduciary duties to investigate and respond to breaches
• Fiduciary obligations in connection with selection of vendors
• Curtailing data leakage and breach exposure by addressing delegation rights of vendors
• Interaction with HIPAA, IRC, and other laws
• Breach notification and ERISA communication duties
• Operational challenges
Our call was led by Lisa Van Fleet and Chuck Thulin, Fiduciary Responsibility, Administration, and Litigation Committee Co- Chairs, along with Cynthia Marcotte Stamer.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a call led by the Welfare Benefit Plans Committee on Friday, March 6, 2015 for a discussion of “Hot Topics.”
Our discussion included:
• What is on your short list of "Hot Topics"?
• ACA litigation, including King v Burwell
• Self-reporting ACA violations
• Other topics, including cafeteria plan elections, etc.
• "Employer "play-or-pay" mandate
• Employer reporting on the B and C Forms
• Employee/Independent Contractor Classification Issues
Discussion leaders: Cynthia Marcotte Stamer, Cynthia Marcotte Stamer, LLC and Elizabeth Ysla Leight, SPBA, Welfare Benefits Committee Co-Chairs
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by the Plan Transactions and Terminations Committee on Friday, January 16, 2015 for a discussion of U.S. Pension Plan liabilities of foreign entities: extraterritoriality, jurisdiction and enforcement.
Harold Ashner of Keightley & Ashner LLP provided a PBGC update. Stanley Hecht of Keightley & Ashner discussed recent litigation involving jurisdiction and application of the controlled group rules to a non-U.S. based company that purchased a U.S. company with a defined benefit plan, where the U.S. company later went into bankruptcy and the plan was terminated and trusteed by the PBGC.
ERISA and the IRC provide for joint and several liability of a contributing sponsor and the members of its controlled group with respect to various defined benefit pension plan liabilities, including those relating to plan termination. The amounts of these liabilities may be significant. There has been recent litigation in U.S. district court involving a non-U.S. based purchaser of a U.S. based company that sponsored a defined benefit plan, where the U.S. based company later went into bankruptcy and the plan was terminated and trusteed by the PBGC. Issues that were litigated include whether jurisdiction existed for a PBGC action for joint and several pension termination liabilities against the foreign parent, and whether as a matter of substance the controlled group rules and attendant statutory pension liability provisions applied to the actions of the purchaser, which was located outside of the United States. The case, captioned PBGC v. Asahi Tec Corp., recently settled, but generated two published pre-trial district court decisions that address these issues. The law in this area is developing and there appears to be a conflict in the case law, with resultant uncertainty. A significant unresolved issue is the collectability of a judgment for pension liabilities against a foreign member of a controlled group that does not have assets in the United States.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group for a conference call led by the IRA Accounts and Plan Distributions Committee on Wednesday, November 19, 2014.
IRAs continue to grow in size as employees receive distributions from qualified retirement plans. Due to the importance of IRAs, the following topics, among possible others, will be addressed during the Group Conference call:
Are individuals receiving proper investment advice for IRA accounts?
The call was led by Frank Palmieri and Bernard Kearse.
- The decision making process of determining whether a retiring participant is better served by keeping his 401(k) plan account balance at the company or rolling it over into an IRA.
- Proper disclosure and documentation when a participant takes a distribution from a 401(k) plan to a IRA Rollover account.
- When do Roth Conversions make sense.
Inherited IRAs are not protected in bankruptcy, as a result of the recent Supreme Court decision. (A brief discussion of new issues that have arisen since our last conference calls.)
Continued discussion of issues related to stretch IRAs in estate planning – discussion of challenges.
The RPTE Employee Benefit Plans and Other Compensation Arrangements Group held a conference call led by the Fiduciary Committee on Friday, September 26, 2014 at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific) for a discussion of the company stock funds and related fiduciary duties and issues in light of the Supreme Court’s recent ruling in Fifth Third v. Dudenhoeffer. Our discussion was led by Lisa Van Fleet, Partner with Bryan Cave LLP. The U.S. Supreme Court recently ruled in Fifth Third v. Dudenhoeffer that the Moench presumption of prudence is dead and that fiduciary decisions relating to company stock funds will be subject to the same standard of review as all other fiduciary decisions. Their decision calls for review and revision of fiduciary procedures relating to company stock funds. A recording of this call was not made available this month.