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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice.  U.S. Treasury Regulations require us to notify you that any tax-related material in this blog (including links and attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties, and may not be referred to in any marketing or promotional materials.  While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you. 

Tuesday
Nov072017

House Tax Bill Targets Deferred Compensation Earned After January 1, 2018 (Really)

It’s early days yet for the Tax Cuts and Jobs Act released last week by the House Ways and Means Committee, but one thing is clear:  Congressional tax writers are scouring the landscape to find a combination of more revenue and accelerated revenue from various sources in order to pay for the substantial cuts in income taxes promised by the House Bill.  House Republicans wisely decided against the “Rothification” of 401(k) plans, which would have generated revenue by reducing or limiting opportunities for pre-tax deferrals under the most prevalent retirement savings vehicle maintained by employers and would also have generated consternation from most industry and employee groups.  But a variety of other tax-favored benefit programs and benefit plan features are being scrutinized for curtailment, including deferred compensation arrangements.  In fact, the proposals contained in the House Bill regarding deferred compensation and executive compensation are nothing short of earthshaking.   Specifically, the House Bill would sweep away the elaborate framework of rules that currently govern various types of deferred compensation arrangements and would also make significant changes to the rules relating to the deduction of executive compensation by public companies. 

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Friday
Sep292017

Dismissal of Case Against UPenn Good News for 403(b) Plan Sponsors

Colleges and universities have finally received some encouraging news in the recent spate of class action suits against higher education 403(b) plans.  Last week a federal judge dismissed all claims against the University of Pennsylvania, marking the first time that one of these recent law suits has been be dismissed in full.  See Sweda v. Univ. of Pa., No. 16-4329 (E.D. Pa. Sept. 21, 2017).

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Thursday
Aug102017

Sound Process and Good Recordkeeping Demonstrate Compliance with COBRA Notice Requirements

Earlier this year the Eleventh Circuit Court of Appeals provided a reminder of how important it is for an employer to establish and follow proper COBRA notice procedures and preserve some type of evidence that the procedures are followed.  Employers who do those things will find that their efforts are rewarded if a COBRA beneficiary claims the employer failed to comply with COBRA's notice requirements.

In DeBene v. BayCare Health System, Inc., the Eleventh Circuit upheld a summary judgment issued against Paul DeBene, a former employee of BayCare Health Systems.  Among other claims, DeBene alleged that he did not receive the required COBRA notice after terminating employment.  In ruling for BayCare the court cited BayCare’s notice procedures, evidence that those procedures were followed, and evidence that other notices sent on the same day successfully reached their intended recipients.  The court determined that such evidence was sufficient to show that BayCare met its obligations under COBRA, regardless of whether DeBene actually received the notice.

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Tuesday
Jun202017

Supreme Court Upholds ERISA Exemption for Church Plans in Advocate Health Care Network v. Stapleton

In this Verrill Voices podcast, Eric Altholz and Misti Munster discuss the implications of the recent Supreme Court decision in Advocate Health Care Network v. Stapleton, which held that a plan established by a church-affiliated organization can qualify as a church plan exempt from ERISA. 

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Wednesday
Jun072017

Supreme Court’s Church Plan Decision Restores Order (But It May Not End the Litigation)

Earlier this week, in a unanimous decision, the U.S. Supreme Court overturned decisions by three federal Circuit Courts of Appeals and held that an employee benefit plan maintained by a church-controlled or church-affiliated organization can qualify as a “church plan” exempt from ERISA regardless of who establishes the plan.  Advocate Health Care Network v. Stapleton, No. 16-74, 581 U.S. ___ (2017).  In a concise and clearly written opinion, Justice Elena Kagan restored order in the church plan universe – and validated nearly 40 years of administrative decisions by the Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation – by explicitly affirming that church-affiliated hospitals and other organizations can establish benefit plans that should be accorded the same treatment as plans actually established by a church.  The Stapleton decision completely shut down the primary line of argument pursued by plaintiffs in a series of class action lawsuits.  The plaintiffs challenged the status of pension plans maintained by hospitals and other church-affiliated organizations as church plans, and sought to bring those plans into the strict regulatory framework of ERISA.  Nevertheless, the decision leaves open one final line of argument that could be pursued by attorneys representing aggrieved plan participants in church plan cases.  So the discussion, and the litigation, may not end here.  

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