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Did They Do It? The Department of Labor “Clearing the Way” for State-Based Retirement Plans

It is not news that Americans aren’t saving enough for retirement. But, what is news, is that this Administration seems to be bent on making some meaningful change on that front with the enactment of one particular solution – state-based retirement plans. After hearing the marching orders of the President to clear the path for state-based retirement savings initiatives (including legislation that automatically enrolls employees in IRAs), the Department of Labor has declared VICTORY!

But let’s take a closer look. What did the Department actually do? And will it withstand public commentary, let alone judicial scrutiny?

Last week, the Department issued two pieces of guidance: an Interpretive Bulletin and a Proposed Regulation. Each attempts to tackle a different element of the state-based IRA arena:

  1. ERISA-Covered Plans, But No Preemption?

Performing a little fancy footwork, the Department issued an “Interpretive Bulletin” (which is, in effect, an interpretation of the Department’s reading of ERISA) in which it describes three specific platforms which purport to allow voluntary employee savings in IRAs. While the Department admits that ERISA will apply in these situations, it rather boldly asserts that the broad preemption provision embedded in the ERISA statute will not preempt these platforms.

Let’s set the scene: ERISA Section 514(a) outlines a sweeping preemption clause claim that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan”. Guided by its desired result (allowing state laws which

How a CFO May Be Subject to 162(m)

How a CFO May Be Subject to 162(m)

November 17, 2015

Authored by: Chris Rylands

CFOAfter the change in securities disclosure laws back in 2006, it was a common statement that the CFO of a public company was no longer covered by the $1 million deduction limit on non-performance based compensation under 162(m) of the tax code. This was (and is) because of a disconnect between the securities laws and the tax code.

The tax code says that the chief executive officer and each of the next four most highly compensated officers whose compensation is required to be disclosed pursuant to the securities rules are “covered employees” for purposes of the $1 million limit. The 2006 changes in the securities rules changed the disclosure rules to require disclosure of compensation of the principal executive officer (usually the CEO), the principal financial officer (usually the CFO), and the three most highly compensated executive officers other than the principal executive officer and the principal financial officer and up to two additional individuals in certain circumstances). The IRS said that lack of a reference to the “principal financial officer” in the tax code meant that CFOs, by and large, were exempt from 162(m).

However, when legal regimes cross, it’s not always as simple as it seems. For smaller reporting companies (generally those with less than a $75 million in public float), the securities rules only require disclosure of the compensation of the principal executive officer (usually the CEO) and the next two most

Scratch & Sniff the New Health Plan FAQs

ACA Blue HighlightLast month the U.S. Departments of Labor, Health and Human Services and Treasury published FAQs offering a veritable potpourri of guidance addressing preventive services, wellness programs and mental health parity.  Some potpourris offer a pleasing aroma – other not so much.  Decide for yourself whether this potpourri of guidance is pleasing based on the following summary.

PREVENTIVE SERVICES – New guidance expands coverage obligations.

Non-grandfathered health plan must cover certain preventive services without the imposition of any cost sharing.

Lactation Counseling/Equipment. Among the preventive services that a non-grandfathered health plan must cover in-network without cost-sharing is comprehensive prenatal and postnatal lactation support, counseling, and equipment rental. The Departments provided the following clarifications with respect to such preventive service:

  • If participants do not have access to lactation counseling in-network, the plan must cover such services received from out-of-network provider at no-cost as preventive services.
  • The list of network providers as required to be disclosed or made available to participants under ERISA must include in-network lactation counseling providers.
  • A plan must cover lactation counseling services performed by any provider acting within the scope of his or her state license or certification (g., registered nurse), subject to reasonable medical management techniques.
  • A plan cannot limit coverage for lactation counseling to inpatient services.
  • Coverage for lactation support services must extent for the duration of the breastfeeding (assuming the individual remains covered under

Dodd-Frank SEC Guidance Executive Compensation – Status

Dodd-Frank SEC Guidance Executive Compensation – Status

November 2, 2015

Authored by: benefitsbclp

With all the rulemaking required under the Dodd-Frank Act, it can sometimes be hard to keep up with the status of the various rules.  Below is a handy chart that details the current status of the various executive compensation rulemakings.  We plan to update this periodically for additional rulemakings, so be sure to come back and visit from time to time.

Last Updated: November 2, 2015

Provision Summary Status of SEC Rulemaking Say on Pay; Say on Golden Parachutes § 951 Requires advisory vote of shareholders on executive compensation and golden parachutes; advisory vote on frequency of say on pay

  • Final rule: adopted January 25, 2011; SEC Rel. No. 33-9178

Compensation Committee Independence § 952(includes comp consultant conflicts) Requires stock exchanges to adopt listing standards that require:

  • compensation committee members to be “independent;”
  • each committee must   have the authority to engage compensation advisers and before selecting any adviser, the committee must take into consideration specific independence factors; and
  • the committee must be directly responsible for the appointment, comp and oversight of the advisers and the company must provide funding.

Requires disclosure of whether the committee obtained advice of a comp consultant, and whether the work raised a conflict of interest and how it was addressed

  • Final rule: adopted June 20, 2012 requiring exchanges to adopt listing standards; SEC Rel. No. 33-9330
  • SEC approved listing standards in January 2013 exchanges subsequently adopted the required listing standards

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