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Benefit Plan Disclosure affected by SEC Staff Compliance and Disclosure Interpretations of Proxy Rules and Schedules 14A/C

May 30, 2018

Authors

Steve Evans, Jennifer Stokes, taavi-annus and mark-stern

Benefit Plan Disclosure affected by SEC Staff Compliance and Disclosure Interpretations of Proxy Rules and Schedules 14A/C

May 30, 2018

by: Steve Evans, Jennifer Stokes, taavi-annus and mark-stern

The SEC staff regularly publishes “Compliance and Disclosure Interpretations” (C&DIs) on various securities matters. Recently, the staff issued new C&DIs related to the SEC’s proxy rules. Previously, the interpretations relating to proxy rules were contained in a “Manual of Publicly Available Telephone Interpretations” which had not been updated since 1999. Included in the new C&DIs are interpretations that affect compensation and benefit plan disclosure in proxy statements filed on Schedule 14A. Most of the new compensation and benefit plan related C&DIs continue the prior Telephone Interpretations, but the following C&DI includes a new substantive interpretation:

  • C&DI Question 161.03: If a registrant is required to disclose the New Plan Benefits Table called for under Item 10(a)(2) of Schedule 14A, the table should list all of the individuals and groups for which award and benefit information is required, even if the amount to be reported is “0”. Alternatively, the
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Eligible Rollover Distributions – Safe Harbor Notices Revised

December 2, 2014

Authors

benefitsbclp

Eligible Rollover Distributions – Safe Harbor Notices Revised

December 2, 2014

by: benefitsbclp

In Notice 2014-74, the Internal Revenue Service (“IRS”) issued amendments to the safe harbor eligible rollover distribution notices – one of which describes the rollover options available to distributions from non-Roth accounts and the other of which describes the rollover options that apply to distributions from designated Roth accounts – for changes in the law and other clarifying changes.  Several of the changes in the non-Roth account notice address the tax effects of in-plan Roth rollovers.  Other changes to both notices incorporate guidance from  IRS Notice 2014-54, which provides an explanation of the allocation of pre-tax and after-tax amounts between distributions to multiple destinations – direct rollover, indirect rollover, directly to participant, traditional IRA and/or Roth IRA.

The descriptions in the safe harbor notices of the tax effects of in-plan Roth rollovers and other distribution choices can be helpful language for participant communications, including

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Reporting and Disclosure Guidance

October 28, 2014

Authors

benefitsbclp

Reporting and Disclosure Guidance

October 28, 2014

by: benefitsbclp

On October 17, 2014, the Internal Revenue Service published a guide entitled “Retirement Plan Reporting and Disclosure Requirements Guide.” The Service states that the Guide is intended to be a quick reference tool to assist plan sponsors and administrators and is to be used in conjunction with the Department of Labor’s “DOL Retirement Plan Reporting and Disclosure Guide” [sic]. The DOL Guide was last updated in August 2013 and is actually called “Reporting and Disclosure Guide for Employee Benefit Plans”.

The IRS Guide covers twenty-five basic notices and disclosures, and, of course, not all of them would pertain to a particular plan. The type of plan determines the number and frequency of participant notices/disclosures. The IRS Guide addresses eleven possible reports, and, as with disclosure, the requirement for reporting depends on the nature of the plan.

The DOL’s Guide identifies thirty-three possible

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Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

Authors

benefitsbclp

Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

by: benefitsbclp

460326385With 2015 just around the corner, certain mandates under the Patient Protection and Affordable Care Act, as amended (“ACA”) are about to become effective. Health plans also have several existing enrollment and annual notice requirements. Below is a checklist of upcoming ACA mandates that employers must implement in preparation for or in 2015 and a summary of existing enrollment and annual notice requirements.

For a refresher on the ACA mandates which became effective this year, please see our 2014 group health plan checklist here.

I. ACA Requirements That Apply to All Group Health Plans (Whether Grandfathered or Not)

On or beginning with the dates specified below, a group health plan must comply with the following requirements, regardless of its status as a “grandfathered health plan”:

Obtain a Health Plan Identifier Number (HPID).

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UPDATE: Health Insurance Marketplace Notice: RELAX!…BUT DON’T PLAY DEAD

September 17, 2013

Authors

Serena Yee and Lisa Van Fleet

UPDATE: Health Insurance Marketplace Notice: RELAX!…BUT DON’T PLAY DEAD

September 17, 2013

by: Serena Yee and Lisa Van Fleet

Health care reform created a new Section 18B of the Fair Labor Standards Act (“FLSA”) to require employers to furnish notice of the coverage options available through Health Insurance Marketplace to employees. The Secretary of Labor delegated responsibility for regulations under the new law to the Department of Labor’s Employee Benefits Security Administration (“EBSA”).

The new notice requirement was to take effect on March 1, 2013.  However, in a set of FAQs published on January 24, 2013, the EBSA concluded that the notice requirement should be delayed for several reasons.  The EBSA anticipated that distribution of the notices would take place in the late summer or fall of 2013, which would coordinate with the open enrollment period for Exchanges (see our earlier post).

On May 8 2013, the EBSA published Technical Release 2013-02, which offered guidance on various aspects of the marketplace notice, including the required content,

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Marketplace Notice Deadline Looming – Who Can Send it?

September 9, 2013

Authors

benefitsbclp

Marketplace Notice Deadline Looming – Who Can Send it?

September 9, 2013

by: benefitsbclp

As most group health plan administrators are well aware, the Marketplace Notice (i.e., notice of coverage options) is required to be distributed to existing employees  by no later than October 1, 2013.

As discussed in our previous Client Alert  and blog entry, the DOL issued model notices and guidance regarding which employers must comply with this requirement, which employees must receive the notice and the notice’s required content.  Links to the models are available on benefitsbclp.com.  A more thorough discussion of  employer’s notice obligation is provided in our Client Alert which can be accessed here. Until last week, one open question was whether an employer could satisfy its obligations to provide the Marketplace Notice by engaging another entity (such as an insurer, multiemployer plan, or third-party administrator) to send the Marketplace Notice on its behalf.

In its Sixteenth set of PPACA-related FAQs issued on

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Paper by (Forced) Choice?

December 3, 2012

Authors

Chris Rylands

Paper by (Forced) Choice?

December 3, 2012

by: Chris Rylands

AARP recently released survey results where plan participants were asked whether they preferred paper or electronic retirement plan disclosures.  AARP is touting this as proof positive that plan participants prefer paper over electronic disclosures.

In a prior life, I (Chris) used to help analyze test results, including those from self-report surveys.  Anyone who has done that work knows that how you ask the question matters greatly.  One of the key findings the AARP cites as strong evidence that participants pine for papyrus is this:

If forced to choose only one method for receiving retirement plan documents, three quarters (75%) of all respondents ages 25+ prefer paper over online.

Sure, except that question assumes a false dichotomy.  Even though many plan sponsors and many in the retirement plan industry have a strong preference for electronic disclosure (which, by the way, helps participants retirement savings accumulation in the

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Single-Employer Defined Benefit Pension Plans: Minimum Funding Requirements Revised Again

August 14, 2012

Authors

benefitsbclp

Single-Employer Defined Benefit Pension Plans: Minimum Funding Requirements Revised Again

August 14, 2012

by: benefitsbclp

Among many other things, the MOVING AHEAD FOR PROGRESS IN THE TWENTY-FIRST CENTURY ACT (“MAP – 21”), which became law last month, changes the minimum funding rules for single-employer defined benefit pension plans. Your actuary can help to determine the effect of  these changes on your company in the short and long run.

Background. Since 2001, the IRS has published rates for determining minimum contributions for each month.  These rates are based on the prior month’s current short-, medium- and long-term corporate bond yields.  Until enactment of MAP-21, a plan could either apply the current month’s full yield curve or use a smoothing technique that blends the rates published over the prior 24 months. In the current low interest rate environment, these rules require very high minimum contributions. This has been mitigated so far by means of short-term patches.

What MAP-21 does. MAP-21 gives longer-term relief

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Jumpstart Our Business Startups Act (JOBS ACT) Contains Executive Compensation Provisions

April 5, 2012

Authors

benefitsbclp

Jumpstart Our Business Startups Act (JOBS ACT) Contains Executive Compensation Provisions

April 5, 2012

by: benefitsbclp

Update (2:45 PM): As expected, President Obama has signed the JOBS Act into law.

The JOBS Act is expected to be signed by President Obama today. According to the Act, it is intended:

To increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.

The Act includes provisions relating to crowdfunding, access to capital markets, exemptions to encourage small company capital formation, increased private company shareholder threshold for registration, and reduced public company compliance and disclosure burdens for “emerging growth companies.”

In addition, Title I of the Act “ Reopening American Capital Markets to Emerging Growth Companies,” includes changes to executive compensation disclosure requirements for emerging growth companies.

Emerging Growth Company. An emerging growth company means a company with total annual gross revenues of less than $1 billion (indexed for inflation). Only companies with an IPO after

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