Employee Benefits and Executive Compensation

Overview

For the past several decades, Dykema has been providing clients the full array of employee benefits and executive compensation legal services and advice. Drawing on this experience, Dykema’s Chambers USA ranked employee benefits and executive compensation lawyers work closely with the Firm’s Corporate Finance, Employment and Taxation Practice Groups to provide invaluable state of the art and proactive counsel to our clients with respect to both traditional and emerging areas of the employee benefits laws, including:

Qualified Plans

Dykema’s lawyers work with our clients on all aspects of their traditional employee benefit plans. We help clients design, implement, fund, administer and terminate qualified employee benefit plans, such as defined benefit, cash balance, profit sharing, 401(k), 403(b), deferred retirement option (DROP) and employee stock ownership (ESOP) plans. We also draft retirement plans and trust documents to comport with Employee Retirement Income Security Act (ERISA), IRS requirements and the securities laws.

Non-Qualified Plans

Dykema’s employee benefits lawyers are well versed in executive compensation and executive plans, including employment agreements, stock options, restricted stock, deferred compensation, long-term incentive plans (LTIPs), severance agreements, golden parachutes, rabbi and secular trusts, phantom and performance share plans and supplemental executive retirement plans (SERPs). We routinely help clients develop creative customized executive compensation packages, advise clients on the competitiveness and tax consequences of such packages and negotiate with executives on behalf of business clients—either as new hires or in severance or continuation of employment scenarios.

Welfare Benefit Plans

Today, welfare benefits plans come in all sorts of shapes and sizes, and work best when designed to fit the client’s specific needs and goals. Dykema’s employee benefits lawyers help our clients design, implement, fund, administer and terminate employee welfare plans, such as cafeteria plans, group health plans, health savings accounts (HSAs), disability and life insurance plans, flexible spending plans (such as medical, dependent care and educational), voluntary employee benefit associations (VEBA trusts) and severance agreements. In working on these types of programs, we help clients achieve their objectives through the most efficient means available.

Transactional Employee Benefits Counsel

When a business is involved in a purchase or sale, merger or acquisition, spin-off, closure or other transaction, it must have all of its employee benefit program ducks in a row. Whatever the nature of the transaction, our employee benefits lawyers skillfully counsel clients through the myriad of employee plan issues that arise.

Public Employer Plans

Dykema boasts a specialized Public Retirement Team of dedicated professionals with extensive experience working with and through the federal and state retirement laws—including Internal Revenue Code (IRC) provisions, Michigan statutes, and the federal and state case law governing state and local retirement plans, including OPEB liabilities.

Compliance With Federal and State Laws Affecting Employees In General

Dykema’s employee benefits lawyers make sure our clients comply with all applicable state and federal laws relating to employees, including the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Family and Medical Leave Act (FMLA), the Health Insurance Portability and Accountability Act (HIPAA), the Worker Adjustment and Retraining Notification (WARN) and Sarbanes-Oxley’s provisions regarding executive compensation. Whether helping a client formulate a new plan or make adjustments to an existing one, we ensure our clients comply with these laws at every juncture. We help clients with ongoing legal compliance through internal self-audits and represent them in external IRS and Department of Labor (DOL) audits, investigations (including Pension Benefit Guaranty Corporation (PBGC) negotiations) and/or disputes relating to administration of plans and/or the other legal requirements governing a specific plan, including securing updated IRS tax-determination letters and private letter rulings.

International Employee Benefits Issues

As the only Michigan member of the World Services Group (WSG), Dykema is well positioned to support our clients’ employee benefits and executive compensation needs across the globe. WSG is a global organization of law firms and other professional service providers with more than 130 member firms operating in over 115 countries. WSG unites major service industry disciplines represented by top professional companies and provides each of them the means to effectively fulfill their respective client needs, both throughout the U.S. and internationally.

ERISA Litigation

Dykema’s lawyers have a deep body of experience defending ERISA claims. Whether brought in the form of a discrete lawsuit or a class action, we work with our clients to develop strategies to bring these cases to a rapid and successful conclusion.

Experience Matters

  • Negotiated employee provisions and all attendant documents for a national automotive original equipment manufacturer in connection with its sale of unprofitable plants.
  • Implemented the buy-out programs under an automotive supplier’s two defined benefit pension plans, pursuant to which approximately 33,000 retirees were offered to exchange their monthly lifetime pension checks for a lump sum cash payment.
  • Performed executive compensation work and acquisition-related benefit plan work for a publicly-traded client, which included projects involving special tax issues related to client’s participation in TARP (Federal Troubled Assistance Relief Program), as well as 409A tax issues in employment agreements, severance programs and employee benefits documentation related to the merger of two publicly traded companies.
  • Reviewed and audited client’s 401K plan documents and operational procedures to detect plan failures and assisted client with a strategy to correct operational failures, which included voluntary submission to the IRS and communications with participants and vendors.
  • Prepared Code Section 125 Cafeteria Plan, including flexible spending accounts, for compliance with IRC, ERISA and other federal law requirements and, where applicable, drafted provisions to coordinate the cafeteria plan and FSAs with health savings accounts and health reimbursement arrangements.
  • Prepared a Legal Wrap Welfare Benefit Plan Document and Supplemental Summary Plan Description to: (i) ensure compliance with all federal laws, including ERISA, PPACA, COBRA, Michelle's Law, HIPAA, CHIPRA Special Enrollment Rights, HIPAA Privacy and Security, QMCSO, Newborn Mother's Act, Women's Health Cancer Rights Act, Medicare Secondary Payer Act, FMLA, USERRA rights, etc.); (ii) specifically describe eligibility criteria for participation in each of the health and welfare programs, the events that will result in a termination of coverage under such plans and any extended coverage periods for employees on leaves of absence and/or retirees; (iii) include clear provisions regarding plan administration, coordination of benefits, subrogation and amendment and termination rights and provisions written in a manner to protect the employer; and (iv) clearly constitute a legal wrap plan document for all welfare plans sponsored by the employer for purposes of filing one consolidated annual return—Form 5500 for all of the various welfare benefit programs.
  • Prepared all necessary documents for an employer’s group health plans to comply with HIPAA Privacy and Security Rules, including: (i) Employer Certification and HIPAA Amendment; (ii) Written HIPAA Policies and Procedures; (iii) Business Associate Agreements; (iv) Notice of Privacy Practice; (v) Authorized Employee Confidentiality Agreement; and (vi) HIPAA Authorization Form. Also, performed on-site HIPAA training sessions for authorized employees and audited for operational compliance with HIPAA Privacy and Security rules.
  • Reviewed and negotiated administrative services agreements with third party administrators of client’s welfare plans.
  • Prepared all trust and plan documents related to retiree health and other welfare arrangements (including IRC 115, GASB and/or VEBA trust documents for governmental plans, Retiree Health Reimbursement Arrangements, Investment Policies, etc.) and assessed contractual obligations for retiree medical and union agreement issues.
  • Assisted new start-up regional hospital entity in spin-off from local government, involving unique public-to-private entity pension issues. Drafted, amended and submitted new defined benefit plan with IRS, prepared SPD and employee notices, coordinated with actuaries and investment advisors and provided ongoing advice to the HR department on various benefit and administration issues.
  • Assisted client with evaluating and negotiating benefits issues in the purchase of majority ownership of stock, including assessment of controlled group issues related to employee benefit programs, due diligence review of benefit plans, drafting benefit provisions in the stock purchase agreement and preparing new plan documents, amendments and IRS or DOL filings to clean up benefits structure pre- and post-closing, etc.
  • Represented a bank client in an ERISA dispute through which the plaintiff pension fund sought damages and equitable relief based upon bank’s alleged improper purchase of a ten million dollar bond.
  • Prepared Act 345 and other public employer retirement systems plan documents, statutes and ordinances.  

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