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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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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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IRS Clarifies SECURE Act Changes to Qualified Automatic Contribution Arrangements
The IRS recently published Notice 2020-86 (the “Notice”), which provides clarification with respect to certain changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”). In particular, the Notice answers several outstanding questions related to the maximum default deferral rate for qualified automatic contribution arrangements.
As previously reported here, the SECURE Act raised the maximum permissible deferral rate for qualified automatic contribution arrangements to 15% of compensation from 10% of compensation for the second plan year and all subsequent plan years. The maximum deferral rate through the end of the first year remains set at 10% of compensation. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged automatic contribution, IRS, Notice 2020-86, qaca, qualified automatic contribution arrangement, SECURE, treasury
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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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With a New Administration, Will the Department of Labor’s Fiduciary Rule Once Again be Revised?
The Department of Labor’s (the “DOL”) attempts to regulate the conduct of fiduciaries under ERISA and the Code has been mired in controversy. In 2010, the Obama administration’s DOL proposed a fiduciary regulation that was met with so much criticism that it was subsequently withdrawn in 2011. In 2015, the DOL re-proposed a fiduciary regulation that imposed a fiduciary standard on financial advisors giving clients advice about their retirement plan investments. The DOL issued final regulations and the final rule was being implemented when it was struck down by a federal appeals court in June 2018.
In June 2020, the DOL proposed a new fiduciary rule which significantly revises the Obama administration fiduciary rule. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged DOL, ERISA, fiduciary duty, financial institutions, iras, plan investments
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Is Your Safe Harbor Section 401(k) Plan Required to Provide an Annual Notice?
Sponsors of safe harbor Section 401(k) plans should consider whether they are required to provide their annual safe harbor notice in 2020 for the upcoming 2021 plan year. The Setting Every Community Up for Retirement (“SECURE”) Act, which was enacted on December 20, 2019, changed the annual notice requirements for some safe harbor Section 401(k) plans.
Prior to the SECURE Act, safe harbor Section 401(k) plans were required to meet certain annual notice requirements regardless of whether they relied on matching or nonelective contributions to satisfy the safe harbor requirement. The Internal Revenue Code requires that this annual safe harbor notice be provided to participants within a reasonable period before the beginning of the plan year. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged safe harbor 401(k) plan, SECURE ACT
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Final DOL Rule Imposes Fiduciary Limitations on Social Investing
The DOL recently issued a final rule (“Rule”) providing guidance on the long-standing issue of whether ERISA fiduciaries are permitted to consider non-pecuniary factors while making investments (or selecting investment funds) that promote one or more environmental, social or corporate governance goals (so called “ESG Investments”). The preamble to the Rule acknowledges that ERISA fiduciaries must act solely in the interest of plan participants/beneficiaries and that courts have consistently interpreted this interest to refer to pecuniary, rather than non-pecuniary benefits.
Prior DOL ESG Investment guidance also required ERISA fiduciaries to place financial returns over other non-financial goals and prohibited a fiduciary from subordinating the interests of participants/beneficiaries in their retirement income to “unrelated objectives.” Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged DOL, environmental, ERISA, ESG, ESG Investments, fiduciary, governance, social
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Department of Labor Issues Final Electronic Disclosure Rule
On May 21, 2020, the Department of Labor (the “DOL”) announced a final rule establishing a new electronic disclosure safe harbor. The new safe harbor permits retirement plan administrators to deliver certain plan documents by one of two methods: (1) a “Notice and Access” method; or (2) a direct email method. The new safe harbor is unavailable to health and welfare plans. The regulatory electronic delivery safe harbor established by the DOL in 2002 is not superseded by the new safe harbor and is still available as an option for plan sponsors. A brief summary of the new safe harbor follows. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged DOL, electronic disclosure, internet availability, NOIA, paper notice, plan administrator, safe harbor
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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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