Honigman's Employee Benefits and Executive Compensation practice group advises clients in the design, operation, and day-to-day administration of their employee benefit and executive compensation arrangements, as well as when legal compliance issues arise or when these plans or arrangements are being scrutinized by a government agency. Our clients include private and public companies, nonprofit organizations, tax-exempt entities, and private equity funds. Our Employee Benefits and Executive Compensation team also has extensive experience advising clients and guiding them through complex employee benefits and executive compensation issues arising in corporate transactions of all kinds, including mergers, acquisitions, carve-outs, divestitures, and restructuring.
We understand how critical benefits and compensation programs are to employees and the challenges that companies face in designing and maintaining these plans, programs and arrangements in compliance with the myriad of, and constantly changing, legal requirements.
Our lawyers are dedicated to helping companies navigate a wide array of employee benefits and executive compensation compliance matters, including:
- Designing and drafting plan documents and plan amendments for tax-qualified and non-qualified retirement plans, including 401(k), profit sharing, pension, cash balance, 403(b), 457, and nonqualified deferred compensation plans
- Designing and drafting all types of equity and cash incentive plans and arrangements, including nonqualified deferred compensation arrangements, bonus, retention bonus, change in control, and similar incentive arrangements, and stock option, phantom stock, restricted stock, and similar equity or equity-based incentive compensation programs
- Advising on compliance with the Internal Revenue Code, Employee Retirement Income Security Act (ERISA), Patient Protection and Affordable Care Act (ACA), HIPAA and multiple employer welfare arrangement (MEWA) requirements
- Counseling on the correction of plan operational and document errors
- Drafting and reviewing participant communications, including summary plan descriptions, fee, and other disclosures
- Advising for plan mergers, spin-offs, and terminations
- Advising regarding plan committee and fiduciary duty and process
- Reviewing and negotiating third-party administrator and other service provider agreements
- Advising and negotiating employee leasing arrangements
We counsel our clients through the employee benefits and executive compensation aspects of every phase of a corporate transaction, including due diligence, the transaction documents, and the transition and integration process, as well as any post-closing action items. Some examples include:
- Drafting and negotiating representations, warranties, covenant, and indemnification provisions of the transaction documents, including purchase agreements, merger agreements, financing documents, and transition services agreements
- Advising on ERISA “controlled group” liabilities and implications
- Developing a “playbook” to facilitate a smooth, timely and compliant integration process and post-closing risk mitigation strategy
- Advising on the treatment of equity and equity-based incentive arrangements before, during and after the transaction
- Performing Internal Revenue Code Section 280G analysis regarding “parachute payments” and drafting waivers and shareholder voting documentation when applicable
- Drafting reportable event filings and negotiating “early warning” actions and involvement by the PBGC
- Advising with respect to the implications of multiemployer pension plan obligations and liabilities, including withdrawal liability assessments, settlements and agreements
- Drafting employment agreements, severance agreements, transaction bonus agreements and other documentation relating to the employees and service providers who are integral to the business
- Advising on the transaction implications and procedural and fiduciary requirements when a company involved in the transaction is ESOP-owned
Audits, Investigations, Penalties, and Corrections
Our Employee Benefits and Executive Compensation lawyers understand that mistakes happen in the operation and administration of benefit and compensation plans and that our clients need an experienced advisor when a government agency is involved, such as the Internal Revenue Service (IRS), the Department of Labor, or the Pension Benefit Guaranty Corporation (PBGC). We have represented our clients in the following types of matters:
- Evaluating voluntary corrections and drafting related filings with the IRS and the Department of Labor
- Drafting private letter and other rulings to be obtained from the IRS or the Department of Labor
- Negotiating employer shared responsibility payment and other penalty assessments under the ACA with the IRS
- Advising and navigating an audit, investigation, or inquiry with the IRS, the Department of Labor, or the PBGC
- Preparing determination letter applications and other submissions to the IRS
Connect with a Professional
- Represented a large, publicly traded multinational corporation before the Pension Benefit Guaranty Corporation (PBGC), first by negotiating a multimillion-dollar reduction in additional pension funding requirements occasioned by a plan shutdown and next by being among the first to act in obtaining a complete elimination of such requirements after the issuance of new enforcement guidance
- Assisted a large private company in the termination of its pension plan on an expedited review basis with the Internal Revenue Service (IRS) and the PBGC and obtained approval for the offering to current retirees of a novel, lower-cost, lump-sum payout of their benefits
- Assisted a large, publicly traded company with the merger of numerous complex pension plans into a single plan and the subsequent IRS approval of the merged plan, resulting in cost-savings and operational efficiencies for the client
- Advised a large, privately held financial entity in the design and operation of its executive compensation programs for compliance both with the Code section 409A deferred compensation rules and the special TARP executive compensation rules
- Represented a private equity fund in a $100+ million buyout of large, publicly traded publishing and entertainment company regarding the ERISA venture capital operating company requirements for both the fund and several private fund investors
- Advised a large, publicly traded company in the negotiation and design of a unique deferred compensation arrangement with its key executive allowing for the tax-advantaged additional deferral of significant compensation that would otherwise have become payable and taxable to the executive
- Advised major university healthcare plan in negotiations involving the sale of the university’s Health Maintenance Organization to a private insurer
- Successfully defended complex pension case in which claimants sought benefits from both and hourly and salaried pension plan for the same years of service
- Advised underwriter’s counsel in raising $1.4 billion to relieve underfunding of the City of Detroit’s pension plans
- Advised independent bond counsel in raising $800 million for Oakland County to pre-fund its retiree medical benefit obligations
- Represented major public company in successfully negotiating with the IRS to have millions of dollars of additional pension fund contributions be subject to tax loss carryforward treatment
- Defended public company from benefit claims of former executive who had been convicted of embezzling from the company
- Represented major public company in 4062(e) negotiations with the PBGC
- Represented client in designing a plan and negotiating it with the union, the PBGC, and a multiemployer pension plan (in which it was the last remaining employer) to have the client’s plans assume the liabilities of the multiemployer plan in a way that would save benefit costs going forward and avoid withdrawal liability
- AEP Industries, Inc.
- Ally Financial Inc.
- Edw. C. Levy Co.
- Fisher & Company, Incorporated
- Penske Automotive Group, Inc.
- Tecumseh Products Company
- TriMas Corporation
- Valeo, Inc.
- Wallside, Inc.
News & Insights
- Michigan and Federal Surprise Billing Legislation: Protection for Consumers, Increased Burdens for Providers, and Boon for PayorsPublication | State Bar of Michigan - Health Care Law Section,
- Publication | Plan Consultant, American Society of Pension Professionals & Actuaries, Summer 2021
- Employer-Sponsored Health Plans Must Cover or Reimburse Costs of Over-the-Counter COVID Testing beginning January 15, 2022Alert |
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Audits, investigations, penalities and corrections