On August 26, 2020, the SEC adopted final amendments to Regulation S-K, which modernize certain disclosure requirements relating to description of business, legal proceedings and risk factors. The amendments include a new disclosure topic that will require registrants to describe their human capital resources, including any human capital measures or objectives that the registrant focuses on in managing the business, to the extent that such information is material to an understanding of the registrant’s business…
Large companies doing business in San Francisco may soon be subject to an additional tax if voters approve the so-called “Overpaid Executive Gross Receipts Tax” this coming November. Joining a minority of municipal governments that have imposed an “executive pay ratio tax” on the heels of the SEC’s CEO pay ratio disclosure rules, the San Francisco Board of Supervisors recently approved a ballot initiative for this November’s election that calls for the imposition of a…
In an apparent follow-up to its General Legal Advice Memorandum dated May 18, 2020 (GLAM 2020-004), the IRS has issued an internal procedural update that (1) extends the application of the administrative waiver of late employment tax deposit penalties for stock options to stock-settled restricted stock units (“RSUs”) and stock appreciation rights (“SARs”) and (2) shortens the waiver’s deposit period by one day to align with current SEC securities open-market transaction settlement rules. The internal…
For an update on this development, see our July 15, 2020 post here. The IRS has issued a General Legal Advice Memorandum (GLAM 2020-004) that could increase the audit risk and exposure for late deposit penalties for companies granting stock-settled restricted stock units (“RSUs”) and either (i) not making their next-day employment tax withholding deposits with the IRS within one day of when they request their transfer agent to transfer shares underlying the RSU award…
On June 19, 2020, the IRS released Notice 2020-50 (the Notice) which provides additional guidance on tax-favored distributions from retirement plans and expanded plan loan relief under the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act). As noted in our prior alert, the CARES Act provides that during the period January 1, 2020 to December 30, 2020, “qualified individuals” may take coronavirus-related distributions of up to $100,000 from their eligible retirement plans. A…
Department of Labor (DOL) issued final regulations establishing new safe harbors for the electronic delivery of required retirement plan disclosures under ERISA. As background, retirement plan administrators must deliver required disclosures using methods that are reasonably calculated to ensure actual receipt of documents by plan participants. Under prior guidance from 2002, the DOL created a safe harbor electronic delivery method for required disclosures. But the 2002 safe harbor is only available with respect to employees…
Employers considering COVID-19-related layoffs and RIFs right now should add one more item to their checklist of considerations: the possibility of inadvertently triggering a “partial termination” of their tax-qualified retirement plan. Where plan participant numbers decrease substantially, the plan may incur what’s known as a “partial termination.” This is significant because, once triggered, the IRS requires the benefits of all “affected employees” be fully vested. Failure to provide such vesting could put the plan’s tax-qualified…
The financial fallout from the outbreak of COVID-19 has unfortunately forced employers to turn to layoffs and furloughs. Many employers facing these decisions are looking for cost effective ways to mitigate the financial impact on affected employees. A supplemental unemployment benefit plan (“SUB Plan”) may be one way to assist employees while generating some cost savings for the company. A SUB Plan is a unique type of severance benefit plan that permits employers to supplement…
The Coronavirus Aid, Relief, and Economic Security Act (the “Act”) was passed by the US House of Representatives by a voice vote today after being passed by the US Senate on Wednesday. The bill now heads to the White House, where President Trump is expected to sign it very soon. Below are some key retirement plan features of the Act: Coronavirus-Related Distributions. The Act would allow participants in eligible retirement plans to take distributions in 2020 of…
Effective as of February 1, 2020 Institutional Shareholder Services (ISS) will increase its focus on gender diversity within corporate boards of directors with its updated policy on diversity in corporate board composition. This policy was announced in its “Proxy Voting Guidelines Updates for 2020” published on November 11, 2019. After publishing its original board composition diversity policy, which allowed for a one-year transition period, ISS now increases the pressure on public companies to make a…