Flaster/Greenberg can provide a full range of services relating to the compensation of employees, from the simplest bonus plans to the most complex 401(k) or phantom stock plan. We recognize that there is no "one size fits all" employee benefit program. Each plan must be crafted to serve the needs of a particular business, whether that means attracting or retaining key employees, attuning the incentives of rank-and-file employees with those of the business owners, or providing a tax-favored retirement program for the owners themselves.
Design and Implementation of Qualified Retirement Plans
The qualified retirement plan provides a tremendous vehicle for the employees and owners of a business to invest pre-tax dollars for long-term savings goals. Flaster/Greenberg has substantial experience in the design, implementation, and administration of the full range of qualified retirement plans, including traditional pension and profit sharing plans, defined benefit plans, defined contribution plans, special age-weighted plans, and a variety of 401(k) plans. Using sophisticated software technology, our pension professionals can develop multiple "what if" scenarios allowing for the design of an appropriate plan for any business.
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Owner-Friendly 401(k) Plans
A cash or deferred arrangement, sometimes known as a 401(k) plan (after the section of the Internal Revenue Code under which these plans are established), is often viewed as an ideal vehicle to encourage employee retirement savings and in fact it can accomplish this goal quite effectively. This is particularly true when the employer provides a savings incentive, for example by offering a "matching contribution" to promote greater participation. However, 401(k) plans are subject to numerous non-discrimination rules which can limit the participation by owners and other highly paid employees, particularly when the plan is maintained by a company with relatively few employees. Careful design of a 401(k) plan can actually take advantage of different 401(k) compliance requirements to provide greater benefits to the highly compensated owners, at a lower cost, than would be available in a traditional profit sharing plan, which is funded solely by employer contributions. We typically consider a wide range of different combination or hybrid plan designs (with and without 401(k) features) in order to achieve the best result for the business and its owners.
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Employee Stock Ownership Plans (ESOPs)
An employee stock ownership plan, or ESOP, may be the perfect choice for an employer who wants to give employees an equity stake in the business or design a tax-favored strategy to transfer control of the business from one generation of management to the next. These plans are designed to invest primarily in stock of the employer, and can be eligible for special exemptions from certain qualification rules which allow them to engage in otherwise prohibited transactions to acquire employer stock or permit contributions in excess of the limits otherwise applicable to a profit sharing plan.
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Executive Compensation
We are experienced in working with employers-from emerging growth companies to large established corporations-that need to develop creative compensation arrangements to recruit and retain key talent. We also regularly represent executives in negotiating their compensation packages and severance agreements. We look for ways to use such strategies as stock grants, restricted stock, stock options, phantom stock, stock appreciation rights, incentive-pay plans, deferred compensation plans, and golden parachutes to achieve clients' business goals.
Stock Options, Phantom Stock and Other Deferred Compensation Plans
A non-qualified deferred compensation plan can be used effectively in conjunction with a qualified retirement plan to provide additional benefits or incentives to a select group of management or highly compensated employees. Because these programs are not subject to the rigorous tax qualification requirements, it is often possible to design a program with great creativity to address the employer's needs in a particularly effective way. One of the more popular approaches to provide incentives to management employees is to provide them with the opportunity to acquire stock of the employer so they can share in the increased value of the company. Another alternative, which is often very attractive in a closely held business, is to provide a "phantom" stock interest, in which the employee receives the economic benefits of stock ownership, but does not acquire any voting rights as he would with an actual stock interest.
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Plan Qualification, IRS Audits and Other Compliance Issues
Our lawyers can help employers with compliance issues under both the tax and labor laws governing employee benefit plans. The most basic service consists of submission of plan documents for a determination by the Internal Revenue Service of their tax qualification and of the tax-exempt status of the plan's trust fund. In addition, we can assist employers in addressing operational compliance issues including correction options under the Internal Revenue Service's various voluntary compliance programs, and identification and correction of prohibited transactions and other problems, including obtaining administrative relief from the Department of Labor.
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Cafeteria Plans and Other Welfare Benefit Programs
Our lawyers can also assist employers in the design and implementation of welfare plans and other fringe benefit programs. These include the design of a cafeteria plan to permit employees to choose from a range of specified benefit options, often using a combination of employer and employee funds on a pre-tax basis. A well-designed cafeteria plan can often help the employer deal with the rising costs of maintaining fringe benefit programs. In its simplest form, a "premium conversion plan" allows employees to pay all or a portion of the premiums for selected insured health benefits on a pre-tax basis.
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ERISA Litigation
Another major aspect of the firm's employee benefits practice is benefits litigation. Our litigation attorneys have substantial expertise and experience litigating disputes that involve employee benefits issues, including claims under the Employee Retirement Income Security Act ("ERISA"). Our ERISA Litigation attorneys have represented companies and individuals in all types of employee benefits disputes, from individual claims for long term disability, severance, medical, and death benefits, to the most complex, high-exposure claims involving ERISA plans. Among their accomplishments, our attorneys helped a Fortune 100 client arrive at a favorable settlement in an amount in excess of $20 million in a dispute with another Fortune 100 corporation concerning the funding of an ERISA plan following our client's acquisition of a number of business units from the other company. Our attorneys are able to achieve such results in these complex suits by combining substantive knowledge of employee benefits law (and the overlapping fields of labor, employment, securities, health care, and insurance law) with the talents of skilled trial lawyers.
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Integration with Other Practice Areas
Our employee benefits specialists work closely with attorneys in other practice areas including commercial transactions and labor law. In the area of commercial transactions, employee benefit plan issues can often be of profound importance in the context of the acquisition or sale of a business, financing transactions and even the choice of a business entity. Attorneys in our labor law group work closely with the employee benefits practice group in a diverse range of matters involving the rights or claims of employees and employers in connection with employee benefit programs.
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