Retirement Plans

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Attract top talent and minimize your risks with effective and compliant retirement plan design and operation.

Employer-sponsored retirement plans are a significant component of the US economy, holding trillions of dollars in assets. They have also evolved into a considerable recruitment and retention tool for employers that likewise impact employees’ future financial security.

Because of the significance to the economy and the future well-being of millions, employer-sponsored retirement plans have become subject to increasingly complicated legislative and regulatory requirements, starting with the enactment of ERISA in 1974. As such, compliance with the complicated tax and fiduciary requirements is—and will continue to be—a critical priority for employers to manage risks and liabilities.

HOW WE HELP

Retirement plan design and operation can have a big impact on a company’s budget, compliance risk, and business practices. We help our clients navigate their complex legal compliance obligations under ERISA, the Internal Revenue Code, and other laws, while striving to minimize the potential for claims and their financial exposure. We have advised clients on nearly every type of benefit plan created, and routinely advise on the entire spectrum of legal and operational issues related to qualified and non-qualified retirement plans, including traditional defined benefit pension plans, cash balance pension plans, 401(k) plans, 403(b) plans, employee stock ownership plans, and profit-sharing plans. We also track changes in legislative requirements and agency regulations to ensure that our clients maintain compliance and avoid costly liabilities.

Plan Compliance and Agency Audits. We routinely work with our clients to establish procedures and processes to address all areas of plan compliance. When mistakes are discovered, we develop appropriate corrective actions consistent with the Department of Labor and Internal Revenue Service correction programs, including as may be necessary, filings under those correction programs. When our clients are faced with an audit from the DOL, IRS, or PBGC, we handle complex audit and correction matters requiring negotiations with the agencies.
Plan Communications. When sponsoring a qualified retirement plan, there are a number of notices, forms, and other communications that must be distributed to participants as well as beneficiaries. Navigating the disclosure rules imposed by both the IRS and DOL can be challenging, and tracking the various deadlines is daunting. Employer communications with employees about their plans must be carefully constructed and vetted to ensure not only compliance with legal requirements, but also for fiduciary missteps. We break down complicated retirement plan concepts for our clients, and prepare effective employee communications. We assist clients in the design and implementation of effective participant communication programs for their plans with more “user friendly” disclosures and processes, which helps to streamline delivery and reduce confusion among participants.
Fiduciary Governance. We are advising nearly all of our clients on the complex and ever-evolving ERISA fiduciary matters that are unfolding and affecting plan fiduciaries today (particularly defined contribution plan fiduciaries). We assist our clients in developing best practice fiduciary governance structures and partner with those fiduciaries and the various fiduciary committees our clients develop to provide the oversight and guidance these committees need in today’s legal environment.

Defined Benefit Plans

Our experienced pension attorneys include individuals with backgrounds in related fields, including prior careers with various government agencies, as well as accounting and actuarial firms. The law surrounding defined benefit plans is complex and non-compliance can result in significant liability. We counsel clients in the design and implementation of defined benefit plans constructed not only to reduce plan costs and future liabilities, but also to comply with new legislative and regulatory requirements. Where necessary, we bring to bear experienced ERISA litigators to assist in assessing alternative strategies and solutions.

We advise clients on the many complex issues they face in this area, including:

Hybrid Plans. We are well acquainted with the unique challenges of “hybrid plans,” such as cash balance and pension equity plans. We have a deep understanding of the complex legal issues and potential pitfalls surrounding hybrid plans that allow us to strategically mitigate our clients’ risk while achieving their business goals.
Fiduciary Governance. Through our Institutional Investor practice, we provide innovative counseling to pension plan fiduciaries across the country on investment oversight responsibilities and the legal aspects of institutional investing, including with respect to the selection and retention of investment managers and consultants, as well as, reviewing investment management agreements and private equity, hedge, real estate, fixed income, and emerging market funds. We can call upon a team consisting of not only our employee benefits attorneys, but also real estate, tax, private equity, securities, corporate, finance, and litigation attorneys to handle virtually every aspect of an investment. We evaluate the risk related to fiduciary duties (under either ERISA or state trust law), corporate/partnership law, and tax law, as well as potential economic concerns.
Pension De-risking. We work alongside clients on de-risking strategies, including transferring interest rate and mortality risks for a defined population through an annuity purchase, or reducing PBGC premiums and administrative fees by reducing headcount through a lump sum window, as well as more innovative techniques, such as variable rate premium strategies.

Defined Contribution Plans

We are well-versed in the design, operation, and fiduciary issues related to implementation and administration of defined contribution plans. With a business-oriented approach, we help companies design plans and plan features that attract and retain employees, reduce administrative burdens and costs, coordinate with other retirement plans, increase employee participation rates, and address non-discrimination testing risks to ensure that the plans do not overly favor higher paid employees over lower paid employees. Clients also benefit from our seasoned counsel on plan fiduciary considerations, including plan governance, 401(k) fee issues, and the maintenance of company stock funds.

We advise clients on the many complex issues they face in this area, including:

Employee Stock Ownership Plans (ESOPs). ESOPs are qualified retirement plans that give workers ownership in the company. Our ESOP team carefully reviews the potential liabilities associated with maintaining employer stock funds as investment options under their 401(k) plans.
Safe Harbor 401(k) Plans. Safe harbor 401(k) plans are designed to avoid certain nondiscrimination testing requirements that apply to other 401(k) arrangements, and can be used to permit highly compensated employees to contribute to the maximum amount permitted by law in industries where the participation rates of non-highly compensated employee are typically low (e.g., retail). We frequently advise our clients on the various types of safe harbor 401(k) plan designs, and help them navigate the IRS’ safe harbor requirements, including contribution levels, vesting rules, distribution restrictions, and participant notice requirements.
404(a) Fee Disclosures. Defined contribution plans that allow participants to direct how their plan account is invested, such as 401(k) plans, are subject to the DOL’s participant-level fee disclosure requirements. Plan administrators are required to distribute a notice to participants and certain beneficiaries each year that includes both plan administrative- and investment-related fee information. We assist clients with the preparation of these complex annual disclosures, and also help clients navigate the applicable timing requirements, particularly in situations where there has been a change to the investment fund line-up.

THE SEYFARTH EXPERIENCE

Our focus is on supporting our clients' ongoing legal needs for the design and establishment, maintenance, and even termination of their retirement plans and programs. The rules applicable to employer-sponsored retirement plans are numerous, often overlapping and as a result, complicated. As such, we break concerns down to elemental issues, which leads to more pragmatic recommendations as quickly and cost-effectively as possible. We are committed to excellence and efficiency in a team-oriented setting, and have a deep bench from which we draw experience in all aspects of retirement plan design and maintenance, communication and governance.

We are particularly well-placed to represent large, public and private employers, including major corporations, as well as not-for-profit and government enterprises engaged in a wide variety of industries, such as education, retail, manufacturing, health care, insurance, and financial services. Often there are industry-specific retirement plan issues that our clients face, and we address those issues as well.

EXPERIENCE

Provided advice and counsel regarding the maintenance of the tax qualified status of a health system’s 401(k) plan, which included submissions pursuant to the Internal Revenue Service’s Voluntary Compliance Program. We were also involved in the design, implementation, and drafting of such plans, as well as early retirement "window" programs.
Assisted a large client with addressing administrative and compliance issues arising from a transition of service providers for administration of its defined benefit plans. Such issues included administration of suspension of benefits for rehires and determining service for participants when transferring among entities and plans with different service rules.
Provide ongoing advice and counsel to a US health care system regarding the maintenance of the tax-qualified status of the client’s cash balance plan, 403(b) plan, 401(k) plan and 457(b) plan, which also includes submissions to the IRS and DOL, as applicable. We have been involved in the design, implementation and drafting of such plans. We are further responsible for the integration of plans of acquired hospitals, practice groups and joint ventures into the client’s benefit structure. We have also advised on corrective measures to be taken when operational and/or documentation issues arise.
Address special questions that arise in the operation of retirement plans maintained for partners and employees of a global law firm. The focus of our representation is the ongoing, day-to-day written and operational compliance of retirement plans with the Internal Revenue Code and ERISA. We perform many of the same services for this client as for others – for example plan drafting, review and revision of trust and investment management agreements, and committee charters. However, there are certain different plan considerations that need to be understood when working for a law firm/partnership.
Assisted large US health care provider with the design and implementation of a multiple wave, multiple year lump sum window project for one of the largest health care providers in the U.S. involving approximately $8 billion in total plan assets and approximately 45,000 active and eligible participants. We played a lead role in all phases of the project, including developing the pension plan rules and plan amendments, preparing participant communication materials and managing participant inquiries and claims.
Serve as outside legal counsel to American multinational appliance manufacturer on executive compensation and employee benefits matters, including all matters related to the client’s ERISA-covered pension plans. Related to the client’s recent third-party annuity purchase and consolidation of its five pension plans into two new plans, we assisted with all facets of these undertakings, including drafting and managing the RFP processes for an insurance company to assume the outgoing benefit obligations and an independent expert to evaluate the insurance company candidates; contracting with all vendors; preparation of presentations and documentation for client’s ERISA fiduciaries; preparation of plan documents and amendments and all associated governmental filings.
Assisted large retail client in splitting its pension plan into two pension plans to take advantage of the per person variable rate premium cap. The strategy significantly reduced present and future PBGC premium payments.
Served as outside counsel for client in terminating its underfunded pension plan in a distress termination. We successfully argued that the client needed to terminate its pension plan in order to remain in business. As a result, client was able to shed its pension liability without declaring bankruptcy.
Helped client redesign its defined benefit and defined contribution program to freeze participation in the defined benefit plan but sunset a group of longer term employees. We advised on how to offer additional benefits under the defined contribution program to allow the defined benefit and defined contribution program to pass non-discrimination testing through cross-testing.
Assisted client in requesting a change in plan year for a smaller pension plan and then merged a larger pension plan into the smaller pension plan before the end of the larger plan’s current plan year. The resulting merger both allowed more accurate financial reporting and also reduced PBGC premiums significantly.

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Attract top talent and minimize your risks with effective and compliant retirement plan design and operation.

HOW WE HELP

Plan Compliance and Agency Audits. We routinely work with our clients to establish procedures and processes to address all areas of plan compliance. When mistakes are discovered, we develop appropriate corrective actions consistent with the Department of Labor and Internal Revenue Service correction programs, including as may be necessary, filings under those correction programs. When our clients are faced with an audit from the DOL, IRS, or PBGC, we handle complex audit and correction matters requiring negotiations with the agencies.
Plan Communications. When sponsoring a qualified retirement plan, there are a number of notices, forms, and other communications that must be distributed to participants as well as beneficiaries. Navigating the disclosure rules imposed by both the IRS and DOL can be challenging, and tracking the various deadlines is daunting. Employer communications with employees about their plans must be carefully constructed and vetted to ensure not only compliance with legal requirements, but also for fiduciary missteps. We break down complicated retirement plan concepts for our clients, and prepare effective employee communications. We assist clients in the design and implementation of effective participant communication programs for their plans with more “user friendly” disclosures and processes, which helps to streamline delivery and reduce confusion among participants.
Fiduciary Governance. We are advising nearly all of our clients on the complex and ever-evolving ERISA fiduciary matters that are unfolding and affecting plan fiduciaries today (particularly defined contribution plan fiduciaries). We assist our clients in developing best practice fiduciary governance structures and partner with those fiduciaries and the various fiduciary committees our clients develop to provide the oversight and guidance these committees need in today’s legal environment.

Defined Benefit Plans

We advise clients on the many complex issues they face in this area, including:

Hybrid Plans. We are well acquainted with the unique challenges of “hybrid plans,” such as cash balance and pension equity plans. We have a deep understanding of the complex legal issues and potential pitfalls surrounding hybrid plans that allow us to strategically mitigate our clients’ risk while achieving their business goals.
Fiduciary Governance. Through our Institutional Investor practice, we provide innovative counseling to pension plan fiduciaries across the country on investment oversight responsibilities and the legal aspects of institutional investing, including with respect to the selection and retention of investment managers and consultants, as well as, reviewing investment management agreements and private equity, hedge, real estate, fixed income, and emerging market funds. We can call upon a team consisting of not only our employee benefits attorneys, but also real estate, tax, private equity, securities, corporate, finance, and litigation attorneys to handle virtually every aspect of an investment. We evaluate the risk related to fiduciary duties (under either ERISA or state trust law), corporate/partnership law, and tax law, as well as potential economic concerns.
Pension De-risking. We work alongside clients on de-risking strategies, including transferring interest rate and mortality risks for a defined population through an annuity purchase, or reducing PBGC premiums and administrative fees by reducing headcount through a lump sum window, as well as more innovative techniques, such as variable rate premium strategies.

Defined Contribution Plans

We advise clients on the many complex issues they face in this area, including:

Employee Stock Ownership Plans (ESOPs). ESOPs are qualified retirement plans that give workers ownership in the company. Our ESOP team carefully reviews the potential liabilities associated with maintaining employer stock funds as investment options under their 401(k) plans.
Safe Harbor 401(k) Plans. Safe harbor 401(k) plans are designed to avoid certain nondiscrimination testing requirements that apply to other 401(k) arrangements, and can be used to permit highly compensated employees to contribute to the maximum amount permitted by law in industries where the participation rates of non-highly compensated employee are typically low (e.g., retail). We frequently advise our clients on the various types of safe harbor 401(k) plan designs, and help them navigate the IRS’ safe harbor requirements, including contribution levels, vesting rules, distribution restrictions, and participant notice requirements.
404(a) Fee Disclosures. Defined contribution plans that allow participants to direct how their plan account is invested, such as 401(k) plans, are subject to the DOL’s participant-level fee disclosure requirements. Plan administrators are required to distribute a notice to participants and certain beneficiaries each year that includes both plan administrative- and investment-related fee information. We assist clients with the preparation of these complex annual disclosures, and also help clients navigate the applicable timing requirements, particularly in situations where there has been a change to the investment fund line-up.

THE SEYFARTH EXPERIENCE

EXPERIENCE

Provided advice and counsel regarding the maintenance of the tax qualified status of a health system’s 401(k) plan, which included submissions pursuant to the Internal Revenue Service’s Voluntary Compliance Program. We were also involved in the design, implementation, and drafting of such plans, as well as early retirement "window" programs.
Assisted a large client with addressing administrative and compliance issues arising from a transition of service providers for administration of its defined benefit plans. Such issues included administration of suspension of benefits for rehires and determining service for participants when transferring among entities and plans with different service rules.
Provide ongoing advice and counsel to a US health care system regarding the maintenance of the tax-qualified status of the client’s cash balance plan, 403(b) plan, 401(k) plan and 457(b) plan, which also includes submissions to the IRS and DOL, as applicable. We have been involved in the design, implementation and drafting of such plans. We are further responsible for the integration of plans of acquired hospitals, practice groups and joint ventures into the client’s benefit structure. We have also advised on corrective measures to be taken when operational and/or documentation issues arise.
Address special questions that arise in the operation of retirement plans maintained for partners and employees of a global law firm. The focus of our representation is the ongoing, day-to-day written and operational compliance of retirement plans with the Internal Revenue Code and ERISA. We perform many of the same services for this client as for others – for example plan drafting, review and revision of trust and investment management agreements, and committee charters. However, there are certain different plan considerations that need to be understood when working for a law firm/partnership.
Assisted large US health care provider with the design and implementation of a multiple wave, multiple year lump sum window project for one of the largest health care providers in the U.S. involving approximately $8 billion in total plan assets and approximately 45,000 active and eligible participants. We played a lead role in all phases of the project, including developing the pension plan rules and plan amendments, preparing participant communication materials and managing participant inquiries and claims.
Serve as outside legal counsel to American multinational appliance manufacturer on executive compensation and employee benefits matters, including all matters related to the client’s ERISA-covered pension plans. Related to the client’s recent third-party annuity purchase and consolidation of its five pension plans into two new plans, we assisted with all facets of these undertakings, including drafting and managing the RFP processes for an insurance company to assume the outgoing benefit obligations and an independent expert to evaluate the insurance company candidates; contracting with all vendors; preparation of presentations and documentation for client’s ERISA fiduciaries; preparation of plan documents and amendments and all associated governmental filings.
Assisted large retail client in splitting its pension plan into two pension plans to take advantage of the per person variable rate premium cap. The strategy significantly reduced present and future PBGC premium payments.
Served as outside counsel for client in terminating its underfunded pension plan in a distress termination. We successfully argued that the client needed to terminate its pension plan in order to remain in business. As a result, client was able to shed its pension liability without declaring bankruptcy.
Helped client redesign its defined benefit and defined contribution program to freeze participation in the defined benefit plan but sunset a group of longer term employees. We advised on how to offer additional benefits under the defined contribution program to allow the defined benefit and defined contribution program to pass non-discrimination testing through cross-testing.
Assisted client in requesting a change in plan year for a smaller pension plan and then merged a larger pension plan into the smaller pension plan before the end of the larger plan’s current plan year. The resulting merger both allowed more accurate financial reporting and also reduced PBGC premiums significantly.