Whether you’re operating an emerging company, a Fortune 50 giant, or a non-profit or public organization, you’re probably juggling questions about a host of new regulations, requirements, and emerging trends related to employee benefits plans and executive compensation arrangements.
We hold regular webinars to explore the most up-to-the-minute topics and offer suggestions for strategies clients may consider to head off litigation and to remain competitive and operationally compliant.
In the March 10 edition of our quarterly “What We’re Seeing” webinar series (register for “Hot Topics in Employee Benefits: What We’re Seeing – March 2016”), our Employee Benefits and Executive Compensation lawyers will discuss topics of strategic interest to plan sponsors, employers, plan fiduciaries, financial institutions, and any companies that are managing or servicing employee benefits and compensation plans.
The topics on our agenda include the following:
Partners Julie Stapel (co-leader of the Morgan Lewis fiduciary task force), Andy Anderson (leader of our firm’s health and welfare task force), Mims Maynard Zabriskie (co-leader of our executive compensation task force), and Steven Spencer (practice group leader and co-leader of the multiemployer plan task force) sat down with us for a preview of the hottest topics.
A redefined rule on fiduciary investment advice is making its way down the pike. Who should be paying attention?
We expect nearly all players in the retirement plan industry to feel the effects, including broker-dealers, institutional asset managers, managers of private funds, as well as the employers who sponsor retirement plans. The most significant impact will likely be felt by brokerage and investment advisory services, especially with respect to Individual Retirement Accounts (IRAs) and IRA rollovers from retirement plans, such as 401(k) plans.
Until the final rule comes out, we will not know the details. Those in the financial services industry are already evaluating likely impacts. And both plan sponsors and financial services providers should take the rule into account when negotiating contracts involving investment advice, understanding that the ground could shift significantly between now and the effective date of the final rule.
What do employers need to prepare for when it comes to the Affordable Care Act?
As regulators continue to issue ACA guidance, employers need to pay particular attention to the plan design fallout surrounding ACA mandates and shared responsibility issues. Chief among these is whether current plan designs will have to be revised or significantly changed to be certain that employers do not inadvertently create ACA mandate concerns or trigger shared responsibility exposure. As employers begin their 2017 design process, they should determine whether they have to modify:
1. Health Reimbursement Arrangement (HRA) design requirements to avoid stand-alone ACA mandate issues,
2. Pricing approaches, credits, and opt-out payments to satisfy shared responsibility excise tax exposure, and
3. Reimbursement practices that may trigger extreme ACA penalties.
(Register for our March 30 webinar, “Consumer-Driven Healthcare Post-ACA,” as we examine ACA design issues and steps employers can take to avoid problems.)
What important executive compensation issues should clients prepare for as the proxy season approaches?
The Financial Accounting Standards Board (FASB) has introduced a new reporting requirement relating to items that are considered to be of “an unusual nature or of a type that indicates infrequency of occurrence or both.” The FASB revision will eliminate the concept of an “extraordinary item.” This change will affect any existing performance-based grant or bonus that includes an adjustment for extraordinary items under generally accepted accounting principles, to the extent such a grant or bonus includes a performance period with a fiscal year that begins after December 15, 2015. Clients should consider how to handle this change in reporting for outstanding performance periods and new performance awards.
What are the 2016 challenges for equity plan approval?
We will review the steps to successful equity plan approval in 2016, including addressing the requirements set forth by Institutional Shareholder Services (ISS), the leading shareholder advisory firm, recent Delaware litigation relating to director compensation, federal income tax and accounting issues, as well as best practices in corporate governance.
Why should employers be concerned about their contributions to multiemployer defined benefit pension plans?
The financial picture of defined benefit multiemployer plans continues to deteriorate due to low interest rates, poor market performance, and bankruptcies of contributing employers. These forces continue to put pressure on contributing employers, increasing contribution obligations and creating off book liabilities that are front and center when these businesses are put up for sale. Clients that contribute to multiemployer defined benefit pension plans need to be aware of these forces and the legislative and regulatory responses.
With approximately 75 dedicated professionals across the United States, Morgan Lewis offers comprehensive employee benefits and executive compensation services. Our lawyers are leaders on these topics and we will continue to monitor developments closely and keep our clients and contacts informed through our LawFlashes and blog posts on our ML BeneBits blog.