Defined Benefit (Pension) Plans
Defined benefit plans, including both traditional pension plans and cash balance plans, present unique and often complex design and compliance issues for employers. Defined benefit plans are subject to a host of statutory and regulatory requirements that do not apply to 401(k) and other defined contribution plans. Frost Brown Todd's employee benefits team has extensive experience helping clients navigate the ever-changing legal landscape in which defined benefit plans operate. Whether you want to explore adopting a new plan, terminate a mature plan, or anything in between, we can help. Some of the services we provide in this area include:
- Preparing Plan Documents
- Initial documents for a new plan
- Amendments to change or freeze benefit formula or implement other design changes
- Amendments required to maintain tax-qualification status or terminate a plan
- Providing or reviewing Participant Disclosures and Administrative Forms
- Summary plan descriptions and summary of material modifications
- Notice of change or freeze in benefit formula
- Notice of benefit payment restrictions due to the funding level of the plan
- Benefit distribution election packages and forms
- Qualified domestic relations order procedures and model forms
- Administrative operating manual and internal administrative guidelines
- Plan Administration Advice and Counsel
- Advice on benefit claims and distributions
- Review of qualified domestic relations orders
- Review of Form 5500s
- Guidance on Pension Benefit Guarantee Corporation (PBGC) reporting obligations
- Correction of plan errors – through self-correction or a Voluntary Compliance Correction Program submission to the Internal Revenue Service (IRS)
Multiemployer Pension Plan Withdrawal Liability
We regularly assist employers who contribute to multiemployer (union/collectively bargained) pension plans, commonly referred to as “Taft-Hartley” plans. Special rules governing multiemployer plans were added to the Employee Retirement Income Security Act (ERISA) in the Multiemployer Pension Plan Amendments Act of 1980, sometimes referred to as MPPAA. Because many of these plans are underfunded, contributing employers are assessed a portion of the unfunded vested benefits in the plan (their “withdrawal liability”) if they completely withdraw from the plan (a “complete withdrawal”) or have a significant reduction in the number of employees participating in the plan (a “partial withdrawal”), even if they always paid their annual contribution assessment.
We can review a withdrawal liability assessment for accuracy, prepare an appeal of the assessment to the plan if necessary (called a “Request for Review”), file for mandatory arbitration if such a review is not productive, and file a Complaint in U.S. Federal District Court if the arbitration result is unfavorable. Our employee benefits attorneys and labor and employment attorneys work together to help clients evaluate their risk, request needed information from the plan and track important deadlines for responding to any withdrawal liability assessment.
Our analysis includes determining whether the employer qualifies for any of the exceptions to or special limitations on withdrawal liability and whether other entities or individuals affiliated with the employer or a successor employer (e.g., purchaser of a business) may also be liable for the withdrawal liability assessment.