Employee Benefits and Executive Compensation

As some companies experience financial hardship as a consequence of the Covid-19 pandemic, bankruptcy filings under Chapter 11 of the U.S. Bankruptcy Code are on the rise. Companies looking to restructure and streamline costs in the bankruptcy process often look to employee benefit plans as one area for change.

This article broadly addresses the impact

Employers across the country are restructuring business operations to mitigate the continuing impact of the Covid-19 pandemic. Restructuring business operations—whether by complete shutdown, sale, or bankruptcy—implicates several employer-sponsored health and welfare plan issues. This article provides a high-level overview of common health and welfare plan scenarios that plan sponsors may encounter during a restructuring.

Managing

In late September, the Pension Benefit Guaranty Corporation (the “PBGC”) published Press Release 20-04 and issued Technical Update 20-2 providing flexibility in the calculation of variable-rate premiums for plan sponsors who take advantage of extended pension contribution deadlines for 2020—even in certain circumstances where the plan sponsor has already completed its PBGC premium filing.

The

The DOL recently provided retirement plans with a new method to comply electronically with certain participant disclosure and notice requirements. See our blog post outlining the new DOL rule. This new method adds to the previously issued DOL safe harbor and the IRS rules.  Below is a side-by-side general comparison to help plan administrators

On June 29, 2020, the Internal Revenue Service (the “IRS”) issued Notice 2020-52 that provides temporarily relief to plan sponsors that amend their safe harbor Section 401(k) or 401(m) plans (“Safe Harbor Plans”) mid-year to reduce or suspend employer safe harbor matching or nonelective contributions due to the COVID-19 pandemic.  To qualify for the relief,

In Notice 2020-50, the IRS expanded eligibility for CARES Act distributions and loans, and provided additional guidance.  To recap (as described here), the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) added three types of distribution and loan flexibility under eligible retirement plans for certain “qualified individuals”: (1) “coronavirus-related distributions” (“CRDs”)

This afternoon, the Treasury Department issued Notice 2020-42, ending the uncertainty surrounding spousal consents to retirement plan distributions and loans in the socially distanced COVID-19 world.

As plan administrators know, when spousal consent is required for a plan distribution or loan, the law requires that the consent be witnessed by a notary public or plan

On May 12, 2020, the IRS released Notice 2020-29, which provides significant flexibility for health insurance and flexible spending account election changes during 2020, and Notice 2020-33, which increases the amount that may be carried over from one year to the next under a health flexible spending account (FSA).  The guidance allows increased flexibility

We continue our blog series on COVID-19 implications on executive compensation matters with a post that addresses considerations relating to amending performance goals under equity and other incentive awards.

Setting meaningful and effective performance goals often requires significant focus and analysis by compensation committees with the assistance of their advisors and management.  In light of