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Welcome to the Snell & Wilmer Benefits Blog. We will be posting about current employee benefits and executive compensation topics and issues. We invite you to contact the authors with your thoughts or questions.Blog Contributors
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Updated Nonqualified Deferred Compensation Plan Audit Guide
In June the Internal Revenue Service released an updated Nonqualified Deferred Compensation Audit Technique Guide. This updated Guide replaces the initial Guide published in 2015. While it is too early to say whether the release of the updated guidance signals increased audit activity by the Service in the nonqualified plan space, plan sponsors of nonqualified deferred compensation plans may want to consider reading the updated guidance to re-familiarize themselves with the underpinnings of Section 409A of the Code.
The updated Guide is written in a conversational style and provides a very good outline of key deferred compensation principles. While it may not provide new information for individuals that regularly practice in this space, it will almost certainly be a good initial read for those that are not familiar with Section 409A of the Code or for those that do not regularly work with deferred compensation programs. Read More ›
Posted in Employee Benefits, Executive Compensation
| Tagged 409A, nonqualified deferred compensation, Section 409A
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CalCurrent Podcast and Equity Compensation for Startups
On May 13, 2021, Phoenix executive compensation and employee benefits partner, Greg Gautam, joined Snell & Wilmer’s “CalCurrent” podcast. On his episode, Greg covered five common pitfalls private companies and startup companies should watch out for when structuring their equity compensation and incentive programs. You can listen to Greg’s full CalCurrent episode here if you are interested in learning more about these common mistakes, and more importantly, tips on how to avoid them. Read More ›
Posted in Employee Benefits, Executive Compensation, Qualified Retirement Plans
| Tagged calcurrent, equity compensation, incentive programs, podcast, private company, startup
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In Case You Missed It – Key 2021 Employee Benefits Topics
This year is off to a fast start and plan sponsors might find their heads spinning as they try to keep track of rapidly developing employee benefits legislation and guidance. We periodically consolidate key newsletters and blog posts to help our readers stay organized and catch up on items they might have missed. Below, please find links to several SW Benefits Updates and blog posts covering developments in the employee benefits realm. As always, you can access our entire catalogue of employee benefits blog posts here on the Snell & Wilmer L.L.P. website. You can also view all of our SW Benefits Updates here, and our COVID-19-specific SW Benefit Updates here. Read More ›
Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans
| Tagged COBRA, Consolidated Appropriations Act, multiemployer plan, wellness program
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Credit Where Credit Is Due: IRS Offers Long-Sought Guidance on Employer Retention Credit Program
As we previously reported, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provided for an employee retention credit (“ERC”) designed to encourage employers to retain workers during the COVID-19 crisis. In general, the ERC permits eligible employers to claim a refundable tax credit of a portion of qualified wages paid to employees over a given period.
Initially, the IRS issued guidance on ERCs in the form of online Frequently Asked Questions (the “FAQs”). The FAQs were non-binding and subject to change. As of March 1, 2021, the IRS published formal rules with respect to ERCs in Notice 2021-20 (the “Notice”). Read More ›
Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans
| Tagged CAA, CARES Act, eligible employer, employee retention credit, ERC, paycheck protection program, PPP, Qualified wages
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‘Tis the Season: Four Year-End Employee Benefit Plan Checklists
Each year, we publish health and welfare, cost-of-living, executive compensation, and qualified retirement plan checklists to help individuals and employers stay apprised of updates to the law of employee benefits. We recently published the last of these annual checklists. In case you missed them, the links are below.
Happy holidays!
2020 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare
2020 End of Year Plan Sponsor “To Do” List (Part 2) Annual Cost of Living Adjustments
2020 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation
2020 End of Year Plan Sponsor “To Do” List (Part 4) Qualified Retirement Plans
Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans
| Tagged COLA, cost-of-living, Executive Compensation, health and welfare, qualified plans, year end checklist
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COVID-19-Related Cancellations of NQDC Elections
As a general matter, deferral elections under non-qualified deferred compensation plans (“NQDCs”) cannot be cancelled unless a NQDC plan participant incurs an “unforeseeable emergency” or “disability” as each such term is defined in Section 409A of the Internal Revenue Code. Internal Revenue Service Notice 2020-50 (the “Notice”) adds a third reason to permit the cancellation of NQDC elections, the receipt of a coronavirus-related distribution (“CRD”) from a qualified retirement plan.
The Internal Revenue Service issued the Notice on June 19th to, among other things, help plan sponsors allow plan participants to take advantage of the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) by giving participants greater access to their retirement plan savings. Read More ›
Posted in Executive Compensation
| Tagged CARES Act, covid-19, elections, furlough, lay off, nonqualified deferred compensation, nqdc, reduction in hours
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In Case You Missed It … Recent Posts From the SW Benefits Update
We periodically consolidate our prior blog posts and push them out as a single package to help individuals catch up on what they might have missed with respect to important health and welfare, qualified retirement plan, and executive compensation issues. The posts highlighted here largely focus on the CARES Act and the impact the COVID-19 pandemic is having on employee benefit and executive compensation plans. As always, please feel free to reach out to any member of our employee benefits and executive compensation group with questions. Please enjoy (and have a safe) Memorial Day weekend!
Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans
| Tagged blog, CARES Act, covid-19, Executive Compensation, health and welfare, retirement plan, roundup
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IRS Continues to Extend Key Filing Deadlines in Response to COVID-19
On April 9. 2020, the Internal Revenue Service (the “IRS”) issued Notice 2020-23, which extends a number of key filing deadlines in the wake of the COVID-19 pandemic. The guidance provides welcome relief to individuals and plan sponsors who must perform certain “time-sensitive actions” on or after April 1, 2020 and before July 15, 2020. For Notice 2020-23 purposes, “time-sensitive actions” are described, in part, in Revenue Procedure 2018-58, and include key filings such as Forms 5500, 990, and Section 83(b) elections. Because the relief is provided only for filings due during the period from April 1, 2020 to July 15, 2020, certain individuals and plan sponsors will remain subject to normal filing deadlines. Read More ›
Posted in Employee Benefits, Executive Compensation, Qualified Retirement Plans
| Tagged 5500 deadline, form 990, notice 2020-23, Section 83(b) election
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Salary Deferrals in the Time of COVID-19
As the saying goes, “drastic times call for drastic measures” and, from an economic standpoint, these are drastic times. To fight the battle to stay in business many employers are considering a wide range of alternatives, including employee furloughs, layoffs and terminations. While some employers may also consider sweeping salary reductions, other employers may consider reducing current salaries with the promise to pay those salaries in the future. Employers taking this latter approach must understand that deferring salaries from 2020 to 2021 (or to some other future year) can create compliance issues under Section 409A of the Internal Revenue Code (“409A”). Read More ›
Posted in Employee Benefits, Executive Compensation, Qualified Retirement Plans
| Tagged 409A, coronavirus, covid-19, deferred compensation, pandemic, salary deferral
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Updated Glass Lewis Proxy Voting Guidelines
I previously blogged about certain compensation related updates to ISS’ proxy voting guidelines for 2020. With proxy season in full swing, I wanted to highlight some important compensation related changes to the Glass Lewis 2020 voting guidelines, a full copy of which can be found here.
- Contractual Payments and Arrangements. In their 2020 guidelines, Glass Lewis clarifies its policy for say-on-pay proposals with respect to the analysis of both ongoing and new contractual payments and executive entitlements. In particular, Glass Lewis has provided a list of certain executive employment terms that may result in a negative say-on-pay vote recommendation, which includes, but is not limited to: (i) excessively broad change in control triggers; (ii) inappropriate severance entitlements; (iii) inadequately explained or excessive sign-on arrangements; (iv) guaranteed bonuses (especially multi-year guarantees); and (v) the failure to address any concerning practices in amended employment agreements.
Posted in Executive Compensation
| Tagged change in control, compensation, discretion, Glass Lewis, incetnvei plans, ISS, proxy, shareholder
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