FBT maintains form plan documents to help employers meet plan document requirements in a cost-effective manner. 401(k) plans and other qualified retirement plans have detailed documents that must be updated frequently for changes in the law, often annually. The Employee Retirement Income Security Act (ERISA) requires that all employee benefit plans have a written document. All plans, other than executive–only benefits, are also required to have a summary plan description (SPD) describing the plan's terms in ways participants can understand. In addition to SPDs, retirement and health plans have numerous notices that must be given when participation begins, and other notices that must be given annually. We can provide plan documents, SPDs, notices and administrative forms, or review those prepared by others.
Retirement Plan Compliance and Form Documents
Frost Brown Todd has a pre-approved retirement plan document that is an efficient way to update plans when required by Internal Revenue Service (IRS) rules. Our document assembly software (through Relius) allows us to produce a plan document and summary plan description that is pre-approved by the IRS and avoids the costs and fees of an individually designed plan. (Our form plan is a "volume submitter" type document.)
Employers often use pre-approved plan forms provided by their administrative and investment vendors. We review draft plans prepared by other service providers before they are signed to be sure updated documents don't make changes that are not intended. Unintended changes or plan operations that don't match the plan's terms can create large penalties and unexpected employer corrective contributions.
Employers who seek legal counsel on the front end can save a lot of time and money by avoiding errors. We recommend all employers use legal counsel for these retirement plan matters, and we have extensive experience assisting employers in these areas:
- 401(k)/Retirement plan restatements and amendments
- Administrative services contracts
- Investment advisory contracts
- Vendor fee disclosures – Required under the Employee Retirement Income Security Act (ERISA) Sec. 408(b)(2)
- Participant fee disclosures – ERISA Sec. 404(a)(5)
- Annual safe-harbor notices
- Distribution forms and notices
- Correction of plan errors
FBT's goal is to help clients maintain competitive, effective benefit and compensation plans that are appropriate for the client's size and industry. We work to provide pro-active guidance as legal issues develop, and we maintain close working relationships with human resources and finance personnel and essential outside consultants such as accountants, actuaries and investment advisors.
While 401(k) Plans are by far the most prevalent type of retirement plan employers maintain today, FBT also assists employers with:
- Defined Benefit Pension Plans
- Qualified Profit Sharing Plans
- Employee Stock Ownership Plans (ESOPs)
- Nonqualified Deferred Compensation
- Plans for Tax-Exempt Organizations
- Cash Balance Plans
- Target Benefit Plans
- Cross-tested Profit Sharing Plans
- Simplified Employee Pensions (SEPs), Savings Incentive Match Plan for Employees (SIMPLEs) and Individual Retirement Accounts (IRAs)
Health Plan Compliance and Form Documents
Government audits and litigation involving health plans are on the rise. In 1985, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted requiring health plans to allow individuals to elect continuation of group health coverage following termination or another event that ends health coverage eligibility. COBRA was the only rule at that time other than the basic Employee Retirement Income Security Act (ERISA) requirements applicable to most employer health plans. Today, there is a long list of requirements, such as:
- Health reform mandates on the design of group health coverage.
- Health Insurance Portability and Accountability Act (HIPAA) privacy rules, which impose significant requirements on self-funded major medical plans as well as health flexible spending accounts and Health Reimbursement Arrangements (HRAs).
- HIPAA rules that prohibit discrimination on the basis of health status.
- Americans with Disabilities Act (ADA) and Equal Employment Opportunity Commission (EEOC) rules prohibiting discrimination on the basis of disability and prohibiting employers from asking employees for health information.
- Genetic Information Nondiscrimination Act (GINA) rules prohibiting employers from requesting or accessing employee genetic information or family member health information.
These requirements are enforced by the Department of Labor (DOL), the Internal Revenue Service (IRS), as well as Health and Human Services (HHS) and the EEOC. The DOL has begun to audit employer health plans, and the first thing they ask for is the health plan document and proof that the many required notices have been given to employees and plan participants.
Frost Brown Todd maintains a form health and welfare plan document, summary plan description and administrative forms. These are designed to be adapted to an employer's particular benefit structure in a cost-efficient manner.
Executive Compensation Compliance and Form Documents
Even executive compensation is now subject to complex regulatory requirements, not to mention heightened scrutiny by regulators and the public. Frost Brown Todd's extensive experience handling regular and sophisticated issues to address clients’ strategic concerns allows us to effectively help our clients maintain innovative executive compensation programs.
Executive incentive pay and equity programs are often quite tailored for the particular employer and executives involved, but we have prepared many forms of these plans and programs and can efficiently provide a draft or suggestions. We prepare executive employment agreements which often include provisions for fringe benefits, corporate governance or health care continuation. Each of these has its own tax and practical issues.
Many executive programs are subject to Internal Revenue Code Section 409A and must be carefully drafted to avoid extra taxes assessed on the executive. We have extensive experience with Code Section 409A and how to properly structure programs to avoid unnecessary penalty taxes and standard agreement provisions to achieve this goal. Our objective is to provide proactive guidance to ensure legal compliance while achieving business goals.