In a Private Letter Ruling released on August 17, 2018 (PLR 201833012) (“Ruling”), the IRS approved an employer’s proposed amendment to its 401(k) plan (“Plan”), under which it would make an employer non-elective contribution on behalf of an employee conditioned on the employee making student loan repayments (“SLR non-elective contribution”). As described in the Ruling, the proposed student loan repayment benefit program (the “program”), is a voluntary program under which the employee must elect to…
The Fifth Circuit recently vacated the US Department of Labor’s (“DOL”) 2016 fiduciary rule that had expanded ERISA’s fiduciary definition to those providing investment advice for a fee to an ERISA plan or its participants. In light of the Fifth Circuit’s decision, the DOL has issued a temporary enforcement policy halting the enforcement of certain prohibited transaction claims against investment advice fiduciaries. Under Field Assistance Bulletin 2018-02, the DOL indicated that it will not pursue…
After an abrupt mid-year change, the IRS recently released Revenue Procedure 2018-27, which provides relief for employees with family coverage under a High Deductible Health Plan who also contribute to a Health Savings Account (HSA), by permitting such employees to use the previously announced $6,900 contribution limit for 2018 contributions. In May 2017, the IRS released Revenue Procedure 2017-37 which provided the annual inflation adjusted contribution limits for HSAs and stated that the 2018 contribution…
Join Baker McKenzie for a two-part webinar series to examine how the Tax Cuts and Jobs Act impacts compensation and benefits arrangements maintained by both public and private companies and what actions your company needs to take. PART 1: From the PRIVATE Company’s Perspective | January 9, 2018 We will discuss the provisions with the biggest impact on private companies, including the introduction of a new income tax deferral regime for options and RSUs relating to “qualified stock.” PART 2:…
On June 1, 2017, the United States Court of Appeals for the Fifth Circuit, in Langley v. Howard Hughes Mgmt. Co., L.L.C., 694 F. App’x 227 (5th Cir. 2017), held that William Langley, a former golf club executive, was entitled to receive approximately $255,000 in severance pay, plus attorney’s fees. The Court found that the administrator’s interpretation of a severance plan, which resulted in denying the former executive’s claim for severance pay, was an abuse…
The state of Maryland recently revised their state “Blue Sky” securities law to provide for a self-executing exemption for compensatory benefit plan offerings made in connection with Rule 701 of the Securities Act of 1933, as amended (“Rule 701”). Background A company that is not publicly traded in the US – generally, a company whose stock is not registered under the Securities Act of 1933, such as US private companies or non-US public companies that…
It’s hard to believe it’s been a little over two years since the Securities and Exchange Commission (SEC) adopted the final rule for the CEO pay ratio disclosure as part of its implementation of the Dodd-Frank Act. As most readers will know, the CEO pay ratio rule requires public companies (with certain exceptions) to disclose the ratio of the annual total compensation of their Chief Executive Officer (CEO) to the annual total compensation of their…
Employees today are increasingly mobile and companies that grant equity or have deferred compensation programs are faced with complex withholding and reporting requirements in the various states. Employees who move between states before a taxable event occurs with respect to their equity or deferred compensation are often subject to tax in both their state of residence and states where they provided services, but no longer reside (i.e., states where they are considered a nonresident). States…
The state of Oregon recently enacted Oregon Administrative Rule (OAR) §441-035-0300, a new state “Blue Sky” securities law that makes it easier for an employer that is not publicly traded in the US to grant equity awards to its employees residing in Oregon. Background A company that is not publicly traded in the US — generally, a company whose stock is not registered under the Securities Act of 1933, such as US private companies or…