Understanding Employee Benefits
Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE
Richard Thomas embezzled nearly $20,000,000 from his employer. The employer then kept Thomas’s profit sharing account of about $21,000 as an offset against the embezzled amount. Of course, this violated ERISA’s anti-alienation provisions. Thomas sued his former employer for the money and won.
To add to the employer’s misery, Thomas then sued to recover his…
Employers need to make sure that their employees know when benefits shift from one plan to another as illustrated by this case from Utah:
Martin Marietta Corporation (Martin) operated a cement plant that it later decided to lease to Southwestern Portland Cement Company (Southwestern). The employees operating the plant became covered by a Southwestern pension…
Cash balance plans often provide a pay credit and an interest credit in determining a participant’s accrued benefit. The pay credit is often a percentage of compensation. The interest credit is established in the plan and can be a fixed rate or a formula. Recently the Duke Energy Retirement Cash Balance Plan was sued by…
The Internal Revenue Service has released the 2015 cost of living adjustments affecting dollar limits on benefits and contributions under qualified retirement plans. http://www.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations;-Taxpayers-May-Contribute-up-to-$18,000-to-their-401(k)-plans-in-2015 The following chart summarizes 2015 retirement plan limits and other benefit plan limits. The 2014 limits are also listed for reference purposes.
| 2014 | 2015 | |
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Elective Deferral Limit 401(k), 403(b), 457(b) |
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ERISA lawyers know that employee benefit plans offered by state and local governments to their employees are not subject to ERISA, the federal law that generally governs benefit plans of private employers. However, other federal laws can reach government plans. For example, the Securities & Exchange Commission (SEC) recently announced a settlement with the State…
The Department of Labor (DOL) recently entered into an agreement with GreatBanc Trust Company settling claims relating to its service as trustee of an employee stock ownership plan (ESOP) holding stock of a private company. The DOL had claimed that the stock of the company had been overvalued in a sale transaction. The settlement agreement…
[This article also appears in our Employment and Labor Law/Employee Benefits Executive Briefing: May 2014.]
Employers have been considering the impact on benefit programs, including the qualified retirement plans, of the U.S. Supreme Court’s decision recognizing the validity of same sex marriages. In September, 2013, the IRS issued guidance about the prospective impact of the…
Sponsors of qualified retirement plans know that, generally speaking, plan benefits cannot be taken from a participant through legal process or otherwise be assigned to anyone other than the participant. There is an exception for payments in connection with a divorce under a qualified domestic relations order or QDRO. Qualified retirement plans must honor QDROs…
The IRS and Department of Labor issue a number of publications on different topics, including 401(k) plans. The IRS has posted on its website a couple of jointly issued publications directed at small employers who sponsor or are considering sponsoring 401(k) plans. The publications are “401(k) Plans for Small Businesses” and “Automatic …
On March 19, 2014, a three judge panel of the United States Court of Appeals for the Eighth Circuit issued its decision in Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014). The case came to the Eighth Circuit on an appeal of a decision by the United States District Court for…
