Practice/Industry Group Overview
How does an employer create and maintain effective employee benefits and compensation programs? The process requires the delicate balancing of employee needs, company culture, cost, competitive pressures, and administrative and regulatory complexity. Instead of offering "one size fits all" services, the members of Duane Morris' Employee Benefits and Executive Compensation (EBEC) Group recognize that creative thinking, planning, and a thorough understanding of the client's unique needs are an essential prerequisite to offering legal services that are in line with each client's expectations.
Our attorneys provide clients with the full range of employee benefits legal services. From qualified retirement plans to sophisticated equity compensation arrangements and from executive employment agreements to broad-based health and welfare plans, the members of the EBEC Practice combine practical experience with high-quality and efficient service that leads to practical solutions.
Range of Services
Qualified Retirement Plans
Our attorneys offer in-depth experience in the design, administration and ongoing compliance with respect to qualified plans. We have experience representing plans in a general counsel capacity, including contracting for services, fiduciary counseling, developing administrative policies and advising fund administrators and trustees. Our attorneys offer assistance with plan administration and management, including day-to-day support for in-house benefits personnel regarding plan transactions (e.g., distributions, loans, withdrawals, investment changes, and QDRO administration), participant communications, participant claims and inquiries and contractual relationships with plan service providers. The following types of qualified plans are supported:
- 401(k) and other defined contribution plans
- defined benefit plans, including cash balance and other hybrids
- multi-employer plans
Nonqualified Deferred Compensation
Our attorneys design and draft NQDC plans and counsel clients on all aspects of their plans, including compliance with Internal Revenue Code section 409A. Our attorneys are currently providing guidance to clients on NQDC plans and the issue of pre-409A grandfathered deferrals and transition into Code section 409A-compliant plans.
Our attorneys design, draft and counsel clients on the tax and design implications of executive compensation plans, as well as related federal and state securities law, employment law and accounting considerations.
The EBEC Practice has assisted numerous clients in establishing option plans and other equity compensation arrangements, as well as providing guidance on rabbi trusts and other devices to provide security for nonqualified plans. Recent transactions include:
- negotiating retention, severance and employment agreements
- calculating "golden parachute" liabilities
- creating an equity program for the U.S. executives of a foreign corporate parent
- globalizing the equity incentive plan of a multinational company
- creating SERPs and phantom plans for mid-level executives where equity is not available
- creating nonqualified programs for executives of nonprofit organizations
- designing an equalization program for transferring executives among foreign and U.S. affiliates
Welfare Benefit Plans
With increasing federal regulation of health benefits and rapid changes in the healthcare industry, compliance is becoming increasingly complex. Our attorneys act in a general counsel capacity and provide advice on the impact of many laws affecting welfare benefit plans, including, but not limited to HIPAA, COBRA, FMLA, ADA, ADEA and USERRA. We are often called upon to analyze existing programs to improve them and make them more efficient. We counsel employers and plan administrators in a wide offering of benefit plans, including:
- health, life and fringe benefit plans
- cafeteria plans/medical expense reimbursement plans
- dependent care expense reimbursement plans
- adoption assistance plans
- education assistance plans
- multi-employer health and welfare programs
Our attorneys counsel plan trustees and administrators, business owners and executives regarding their fiduciary responsibilities in a broad spectrum of areas, including:
- ERISA fiduciary status
- ESOP trustees
- prohibited transactions
- advisory fees
- investment of plan assets in nontraditional ventures
Our attorneys are sensitive to the related benefits and compensation issues that impact transactional matters. When appropriate, we interface with our corporate, tax and finance attorneys to provide a complete range of services.
We provide advice to entities, such as insurance companies, that create and market financial products to employers and high net worth individuals. These include:
- insurance company retirement plan products
- new mutual fund trading platforms
- fund-of-funds arrangement with a QPAM to limit potential fiduciary exposure
- special tax sheltered annuity programs
We also work with employers to review and prepare financial products for their employees. These include:
- split-dollar and other insurance arrangements
- funded welfare programs
- rabbi trusts and other methods of funding nonqualified plan accruals
Frequently, litigation in the employee benefits area is based on faulty or incomplete communications of the salient provisions of retirement and welfare plans. Further, the government is requiring the communication of broader and more detailed information in connection with these plans and programs. Our attorneys have considerable experience preparing and reviewing communications materials, ranging from summary plan descriptions to COBRA and other notices to specialized materials for executives. We often create information packages that are both comprehensive and comprehensible.
Benefits-related litigation is one of the fastest growing sectors in the federal court system. Our attorneys work with employment and litigation attorneys to represent companies and individuals involved in benefits-related disputes. Often, these simply involve the application of the claims procedures set forth in retirement and welfare plans. However, with increasing regularity, we find these matters moving through the court system or to another dispute resolution process.
Our EBEC attorneys work with litigators in our Employment and Trial Practice Groups to provide practical advice on both the technical and procedural aspects of benefits-based litigation. This enables us to take advantage of the strengths of our individual attorneys in these representations. Examples of litigation projects include:
- legal compliance reviews of plan documents and operations
- representing plan administrators and financial advisors in fiduciary breach actions
- representing liquidating employee benefit trusts
- preventing the cloning of trade association programs
- preparation of amicus briefs in benefits cases of national importance
- advising clients on the ownership of stock associated with the demutualization of insurance companies
- representing insurers in connection with covered claims on large fiduciary policies