Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries

February 25, 2013

From handling requests for light duty or other modifications follow a leave to investigating the medical justification for leaves or the fitness of an employee to return to work following a medical absence, employers need to use care to manage disability discrimination exposures.

Today’s announcement by the  Equal Employment Opportunity Commission (EEOC) that Wal-Mart Stores, Inc. and Wal-Mart Stores East, L.P.  (Wal-Mart) will pay $50,000 in back pay and damages to settle an EEOC disability discrimination lawsuit highlights the potential disability discrimination risks that employers can face when deciding not to provide a requested accommodation to a worker returning from medical leave while other recent enforcement actions show ADA risks from simply making medical inquiries to a worker on or returning from medical leave.

In its lawsuit against Wal-Mart, Case No. 2:11-CV-00834, filed in the U.S. District Court for the District of New Mexico, the EEOC charged that a Carlsbad, N.M Wal-Mart store violated the Americans With Disabilities Act (ADA) by firing a part-time sales clerk, Marcia Arney because the store refused to provide temporary accommodations ordered by her physician following a period of medical leave.

According to the EEOC lawsuit, when Arney, a 22-year Wal-Mart employee, showed the store manager a note from her doctor requesting an accommodation involving periodic breaks off her feet, the manager refused to return her to her job unless she obtained a medical release with no restrictions. The EEOC claims that had Wal-Mart inquired further, it would have known the accommodation need was temporary and in any case, that Wal-Mart easily could have accommodated the restriction. 

Under the consent decree settling the suit, Wal-Mart will conduct annual live ADA training of management  officials at its Carlsbad store and post a notice on its agreement with the EEOC so that employees are aware  of procedures for reporting disability discrimination. Wal-Mart also committed to not require  disabled workers to produce a full release from their doctor upon returning  from a medical leave. Further, Wal-Mart agreed to engage in an interactive process with disabled employees to find a  reasonable accommodation to assist them in performing their jobs and to report future requests for accommodation, as well as charges and lawsuits alleging disability discrimination to the EEOC for the duration of the decree.

Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment.  The ADA’s provisions on disability-related inquiries and medical examinations reflect Congress’s intent to protect the rights of applicants and employees to be assessed on merit alone, while protecting the rights of employers to make sure that individuals in the workplace can efficiently perform the essential functions of their jobs.   An employer generally violates the ADA if it requires its employees to undergo medical examinations or submit to disability-related inquiries that are not related to how the employee performs his or her job duties, or if it requires its employees to disclose overbroad medical history or medical records.  Title I of the ADA also generally requires employers to make  reasonable accommodations to employees’ and applicants’ disabilities as long as  this does not pose an undue hardship or the employer the employer otherwise proves employing a disabled person with reasonable accommodation could not eliminate significant safety concerns.  Employers generally bear the burden of proving these or other defenses.  Employers are also prohibited from excluding individuals with disabilities unless they show that the exclusion is consistent with business necessity and they are prohibited from retaliating against employees for opposing practices contrary to the ADA.  Violations of the ADA can expose businesses to substantial liability.

As reflected by the Wal-Mart, violations of the employment provisions of the ADA may be prosecuted by the EEOC or by private lawsuits and can result in significant judgments.  Disabled employees or applicants that can prove they fully were denied reasonable accommodations or otherwise subjected to prohibited disability discrimination under the ADA generally can recover actual damages, attorneys’ fees, and up to $300,000 of exemplary damages (depending on the size of the employer).   

The lawsuit against Wal-Mart is part of a wave of lawsuits in which the EEOC or other agencies under the Obama Administration are aggressively challenging medical examination and other medical screenings by private and public employers.  In the Wal-Mart case, the suit challenged an employer’s refusal to provide requested accommodations.  In other cases, however, the EEOC or other agencies under the Obama Administration also have challenged medical inquiries made by an employer to employees during or returning from leave.  Both types of suits send clear signals that employers should use care in making medical inquiries and responding to requests for accommodation from employees taking or returning from medical leaves.  See, e.g., Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

To help mitigate the expanded employment liability risks , businesses generally should act to manage their exposures.  Management needs to recognize the likely need to defend medical inquiries, decisions to refuse accommodation requests or other similar actions that arise when dealing with employees taking or returning from medical leave due to a disability, illness or injury.  Employers need to critically check and document the legitimate business justification for making a medical inquiry or refusing a requested accommodation based on a well-documented investigation and analysis tailored to the specific situation of each requesting employee.

Businesses also should consider tightening their documentation regarding their procedures and processes governing the  collection and handling records and communications that may contain information that could be helpful or hurtful in the event of a discrimination charge.  Businesses need to ensure that all required records and statistics are collected.  In addition, businesses also should consider strengthening record creation and retention efforts to help preserve other evidence that could be invaluable to defending charges and change the way that decisions are made and documented to position their organizations to more effectively demonstrate the defensibility of their employment and other business activities against potential nondiscrimination charges.

As part of this process, businesses also should carefully review their employment records, group health plan, family leave, disability accommodation, and other existing policies and practices to comply with, and manage exposure under the new genetic information nondiscrimination and privacy rules enacted as part of the Genetic Information and Nondiscrimination Act (GINA) signed into law by President Bush on May 21, 2008.  Effective November 21, 2009, Title VII of GINA amends the Civil Rights Act to prohibit employment discrimination based on genetic information and restricts the ability of employers and their health plans to require, collect or retain certain genetic information. Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Employees can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws.  For instance, GINA’s employment related provisions include rules that will:

  • Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
  • Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
  • Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
  • Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
  • Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
  • Mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA;
  • Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and
  • Regulate the collection, use, access and disclosure of genetic information by employer sponsored and certain other health plans.

These employment provisions of GINA are in addition to amendments to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act that are effective for group health plan for plan years beginning after May 20, 2009.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the ADAAA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

 

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

ADA May Require Food Allergy Accommodation By Employers, Schools & Businesses

January 25, 2013

The Justice Department’s recently Lesley  University Settlement (Settlement)  announced by the Justice Department on December, 21, 2012 should be a reminder to employers and others covered by the Americans With Disabilities Act (ADA) of the potential advisability of establishing policies or taking other steps to position their practices for providing food in the workplace or at workplace events or to the public to withstand challenge under the ADA.

 While technically referring to only schools, its recognition of some food allergies as disabilities under the ADA makes the Settlement likely to have significant implications for other businesses and organizations regulated by the employment, public accommodation, education or other disability discrimination rules of the ADA under certain circumstances.  Consequently, schools, as well as employers and businesses covered by the ADA should evaluate their practices for offering and providing accommodations for food allergies to minimize their exposure to disability discrimination charges under the ADA in light of the settlement.

Background of Lesley University Settlement

The charges of discrimination against Lesley University resulting in the Settlement challenged a university meal plan that Lesley University required all students living on campus to take part in, and pay for the meal plan.  Lesley University mandated that each student buy the meal service plan – even if some students with severe allergies could not eat the food available through the plan without risk of illness.   The Justice Department charged that Leslie University violated the ADA by failing to appropriate accommodate the special food needs for these students.  The Settlement Agreement resolves Justice Department that Lesley University with illegally discriminating in violation of the ADA by failing to adequately accommodate the special food needs with severe food allergies that constituted a disability under the ADA. 

While the Lesley University Settlement specifically concerned a school meal plan, the Justice Department’s treatment of persons with severe food allergies as disabled within the meaning of the ADA has potential implications for all types of entities regulated by the ADA.  Meanwhile, schools in particular should carefully review the Settlement as the Justice Department says it expects some but all aspects of the Settlement “will serve as a model for other schools – particularly those that require students to participate in a meal plan.” 

Under the Settlement, Lesley University agreed to act to change its food plan to ensure that its students with celiac disease and other food allergies to take advantage of and fully and equally enjoy the university’s food services in compliance with the ADA as well as requires Lesley to consider exempting from its mandatory plan students who cannot, because of disability, take full advantage of the University’s meal service plan.   

Among other things, Lesley University agreed to:

  • Provide gluten-free and allergen-free food options in its dining hall food lines in addition to its standard meal options;
  • Allow students with known allergies to pre-order allergen-free meals;
  • Display notices about food allergies and identify foods containing specific allergens;
  • Train food service and university staff about food allergy-related issues;
  • Provide a dedicated space in its main dining hall to store and prepare gluten-free and allergen-free foods; and
  • Work to retain vendors that accept students’ prepaid meal cards that also offer food without allergens.

Food Allergies as Disability Under ADA

According to the Justice Department, a disability as defined by the ADA is a mental or physical impairment that substantially limits a major life activity, such as eating. Major life activities also include major bodily functions, such as the functions of the gastrointestinal system. Some individuals with food allergies have a disability as defined by the ADA – particularly those with more significant or severe responses to certain foods. This would include individuals with celiac disease and others who have autoimmune responses to certain foods, the symptoms of which may include difficulty swallowing and breathing, asthma, or anaphylactic shock.

Settlement Implications For Employers, Schools & Other Businesses

Since the ADA has a common disability definition, this means that the recognition of food allergies as a disability likely will be used in other situations involving employers under the ADA’s employment provisions, businesses under the public accommodation provisions or others. 

While the Settlement reflects that food allergies may be disabilities, the Justice Department says the Settlement does not mean that the ADA requires that every place of public accommodation that serves food to the public under all circumstances provide gluten-free or allergen-free food. Accordingly to the Justice Department, the Lesley Agreement involved a mandatory meal program for a defined group of students. Because its meal plan was mandatory for all students living on campus, the Justice Department says the ADA required that the University make reasonable changes to the plan to accommodate students with celiac disease and other food allergies.

The Justice Department has pointed out that the rules governing when accommodation is required are different for schools versus restaurants or others that serve food to the general public.  According to the Justice Department, the public accommodation provisions of the ADA may require a restaurant or other business to take some reasonable steps to accommodate individuals with disabilities where it does not result in “fundamental alteration” of that restaurant’s operations.  Examples of such accommodations might include answering questions from diners about menu item ingredients, where the ingredients are known, or omitting or substituting certain ingredients upon request if the restaurant normally does this for other customers. 

However, the Justice Department has indicated that for purposes of the ADA’s public accommodation provisions, organizations are not required to accommodations that would require that the business to make a “fundamental alteration” to its operations.  For this purpose, the Justice Department has indicated that fundamental alteration is “a modification that is so significant that it alters the essential nature of the good or services that a business offers.” For example, the Justice Department says a restaurant is not required to alter its menu or provide different foods to meet particular dietary needs.  

While the Equal Employment Opportunity Commission (EEOC) and not the Justice Department has authority for the interpretation and enforcement of the ADA’s employment provisions, employers also can expect that the EEOC and/or private plaintiff’s will follow the lead in arguing that food allergies may qualify as disabilities for purposes of determining when employers serving or offering food in workplaces or at work-related events also may be required to make or offer accommodations to address the special needs of individuals with disabilities.

Although many employers may be tempted to discount the relevance of the Justice Department’s recognition of food allergies as a disability based on pre Americans With Disabilities Act Amendment Act (ADAAA) cases that viewed food allergies as not rising to the level of a disability under the ADA.  Since the ADAAA has greatly expanded the definition of a disability and made it easier for an employee to show that a condition is disabling within the meaning of the ADA, employers are cautioned against assuming that food allergies or other disabilities don’t qualify as disabilities based on pre-ADAAA precedent.

The ADAAA makes it more difficult for employers to establish that food allergies or other medical conditions are not disabilities.  As amended by the ADAAA, the ADA presently extends covers individuals as disabled when they have conditions that are “episodic or in remission,” as long as the condition causes symptoms which affect a “major life activity” when active.

Also, the ADAAA now provides that employers can no longer consider whether an individual could ameliorate the effects of the condition through medication or whether other actions.

In reliance upon these changes, the EEOC now takes the position that allergies producing life-threatening reactions are per se substantially limiting under the ADAAA.

Given the likelihood that the EEOC and private plaintiffs now are likely to assert that individuals affected by food allergies rights to accommodation or other ADA based claims in reliance upon the ADAAA, the settlement is likely to fuel added claims against employers, as well as schools and businesses under the ADA’s public accommodations provisions.  In response to these exposures, schools, businesses and employers should consider whether their existing practices and training of workers about ordering, offering or providing food should be tightened to reduce potential exposures under the ADA.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the ADAAA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.   

©2013 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

©2013 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

Peter Madoff 10 Sentence For Defrauding ERISA Plans Reminder Manage Plan Investment Responsibilities

December 27, 2012

Peter Madoff (Madoff), the former Chief Compliance Officer and Senior Managing Director of Bernard L. Madoff Investment Securities LLC (BLMI), was sentenced on December 20, 2012 to 10 years in prison after he pled guilty among other things, to conspiracy to commit securities fraud, tax fraud, mail fraud, ERISA fraud and falsifying records of an investment adviser.

In addition to the prison term, Madoff also was sentenced to one year of supervised release, ordered to pay a $200 special assessment, and ordered to forfeit $143.1 billion, including all of his real and personal property. This amount represents all of the investor funds paid into BLMIS from 1996 – the start of Madoff’s involvement in the conspiracy – through December 2008.

As part of the defendant’s forfeiture, the Government previously entered into a settlement with Madoff’s family that requires the forfeiture of all of his wife Marion’s and daughter Shana’s assets, and assets belonging to other family members. The surrendered assets include, among other things, several homes, a Ferrari and more than $10 million in cash and securities. Marion Madoff was left with approximately $771,733 to live on for the rest of her life.

Madoff’s Sentence Part of Continuing Actions Seeking To Rectify BLMIS Fraud

Among other things, the Superseding Information against Madoff charged that the overt acts in the conspiracy count also included, among other things, making false statements to investors about BLMIS’s compliance program and the nature and scope of its Investment Advisory business. Madoff pled guilty in June 2012. He was sentenced in Manhattan federal court by U.S. District Judge Laura Taylor Swain.

Manhattan U.S. Attorney Preet Bharara said: “Peter Madoff was a gatekeeper, who was supposed to guard against fraud, but instead enabled it – facilitating his brother Bernie’s breathtaking scheme by falsifying compliance records and lying to both regulators and clients of BLMIS. The decade he will spend in prison and the disgorgement of his assets are a just result. Our efforts to hold to account anyone and everyone who played a role in this unprecedented Ponzi scheme continue.”

According to the Superseding Information to which Madoff pled guilty and other court filings:

  • Madoff was employed at BLMIS from 1965 through December 2008. Beginning in 1969, he became the Chief Compliance Officer (“CCO”) and Senior Managing Director of BLMIS. In his role as CCO, Madoff created false and misleading BLMIS compliance documents, as well as false reports that were filed with the U.S. Securities and Exchange Commission (“SEC”) that materially misstated the nature and scope of BLMIS’s Investment Advisory (“IA”) business.
  • As CCO, Madoff created numerous false compliance documents in which he stated that he had performed compliance reviews of the trading in the BLMIS IA business on a regular basis, when in reality, the reviews were never performed. The false statements were designed to mislead regulators, auditors, and IA clients.
  • In August 2006, BLMIS registered as an investment adviser with the SEC. As a registered investment adviser, on at least an annual basis, BLMIS was required to file forms with the SEC that are used as part of the oversight process of investment advisers. Madoff was integrally involved with both the SEC registration process and in the creation of the forms, known as “Forms ADV,” which were materially false and misleading. The numerous false statements in the Forms ADV created the false appearance that BLMIS’s IA business had a small number of highly sophisticated clients and far fewer assets under management than was actually the case. Madoff also misrepresented that he, as CCO, ensured that reviews of the IA trading were being performed.
  • From 1998 through 2008, Madoff engaged in a tax fraud scheme involving the transfer of wealth within the Madoff family in ways that allowed him to avoid paying millions of dollars in required taxes to the IRS. Most, if not all of the “wealth,” came directly or indirectly from IA client funds held at BLMIS. The schemes in which he engaged also allowed Bernard L. Madoff to evade his tax obligations.
  • The methods by which Madoff engaged in tax fraud included the following:
  • Madoff also arranged for his wife to have a “no-show” job at BLMIS from which she received between approximately $100,000 to $160,000 per year in salary, a 401(k), and health benefits to which she was not entitled.
  • In December 2008, when the collapse of BLMIS was virtually certain, Madoff agreed with others to send the $300 million that remained in the IA accounts to preferred employees, family members and friends. BLMIS collapsed before the funds were ever disbursed. On December 10, 2008, one day prior to BLMIS’s collapse, Madoff also withdrew $200,000 from BLMIS for his personal use.
  • Madoff received approximately $15,700,000 from Bernard L. Madoff and his wife, and executed sham promissory notes to make it appear that the transfers were loans, in order to avoid paying taxes;
  • Madoff gave approximately $9,900,000 to family members, and in order to avoid paying taxes, executed sham promissory notes to make it appear that the transfers of these funds were loans;
  • Madoff did not pay taxes on approximately $7,750,000 that he received from BLMIS;
  • Madoff received approximately $16,800,000 from Bernard L. Madoff from two sham trades, and disguised the proceeds of the trades as long-term stock transactions in order to take advantage of the lower tax rate for long-term capital gains;
  • Madoff charged approximately $175,000 in personal expenses to a corporate American Express card and did not report those expenses as income.

Madoff  Victim Compensation Process Continues

In addition to the sentencing of Madoff, the Government has taken steps to clear the way to begin distributing assets forfeited by Peter Madoff in connection with the victim compensation process by filing a motion requesting that the Court find restitution to be impracticable, A similar motion was granted by United States Circuit Judge Denny Chin, who as a United States District Judge sentenced Bernard L. Madoff in 2009. The Department of Justice intends to return the assets forfeited as a result of the Madoff fraud to victims through the remission process.

Richard C. Breeden was retained to serve as Special Master on behalf of the Department of Justice to administer the process of compensating the victims of the Madoff fraud with the forfeited funds. A former chairman of the SEC, Mr. Breeden is Chairman of Richard C. Breeden & Co., which has been involved in (among other things) the administration and distribution of securities fraud claims since 1996. Among other things, Mr. Breeden has served as Corporate Monitor of WorldCom, Inc. and KPMG under its deferred prosecution agreement with the U.S. Attorney’s Office. Mr. Breeden also served as remission special master in connection with the fraud committed through Adelphia Communications Corporation. In April 2012, more than $728 million forfeited in connection with this Office’s investigation and prosecution of the Adelphia fraud was distributed to approximately 8,500 victims, the largest single distribution of forfeited assets to victims in Department of Justice history.

Now that a new Special Master has been retained, and given the pledge of SIPC Trustee Irving Picard and his counsel to lend their support and resources to the new Special Master for the benefit of the fraud victims, we expect the victim claims process to begin shortly. It is anticipated that victims who filed claims in the SIPA proceeding will not have to refile their claims to be eligible for remission. New information about the remission Special Master, and information about the victim claims process, will be posted on the Office’s Madoff website at http://www.justice.gov/usao/nys/vw_cases/madoff.html as soon as it becomes available, along with a link to a dedicated website Mr. Breeden’s firm will establish in connection with the remission proceedings.

Investment Advisors and Others With Discretion Over Funds Should Exercise Fiduciary Care

While the Madorf scandle represents an exceptionally large and long-standing stream of mishandling of employee benefit funds, the investigations and prosecutions also serve as a reminder of the need to carefully comply with the fiduciary responsibility and other requirements of ERISA and other laws to investment advisors and other employee benefit plan asset service providers, plan committees and fiduciaries and the plan sponsors, boards and other individuals responsible for investing or handling employee benefit monies or choosing the parties that possess and exercise that discretion. 

ERISA generally requires that plan asset investments be made prudently and for the exclusive benefit of participants and beneficiaries.  Service providers or others with discretionary responsibiliity or that are investment managers of plan assets must be prudently selected based on careful credentialing and other procedures.  e No prohibited transactions should be permitted.  Fees and other compensation must be set appropriately and properly reported in accordance with ERISA’s fee disclosure rules.  The actions and performance of parties investing in plan assets and their investment performance must be reviewed and monitored prudently.  Proper bonding must be maintained.  Concerns and questions about these activities must be timely investigated in a prudent manner.  Failure to properly conduct these and other ERISA fiduciary responsibilities can expose responsible parties to personal liability for losses, profits improperly realized, a fiduciary administrative penalties, disqualification to serve in plan fiduciary or other positions, and attorneys fees and other costs of recovery, as well as in certain cases like the Madorff fraud, criminal prosecution.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

IRS Plans To Issue 2013 Withholding Guidance By 12/31

December 26, 2012

With employers facing continuing uncertainty about how Congress will address expiring payroll and other tax provisions, the Internal Revenue Service (IRS) plans to issue guidance before December  31 on employer withholding responsibilities in 2013.

In a statement issued this week, the IRS said, “We are aware that employers have questions about 2013 withholding. Since Congress is still considering changes to the tax law, we continue to closely monitor the situation. We intend to issue guidance by the end of the year on appropriate withholding for 2013.”

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials on regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

ESOP, Other Employee Plan Investments In Company Stock Land Plans, Fiduciaries, Sponsors & Others In Hot Water

December 10, 2012

 Companies that sponsor employee benefit plans that have purchased or own stock in their sponsor beware.  Declines in the stock value of company stock purchased by employee stock ownership plans (ESOP) or other employee benefit plans in their plan sponsor have a growing number of plans and the plan sponsors, sponsoring company owners and management, plan trustees and other plan fiduciaries in hot water with the Department of Labor.  ESOP or other employee plans that have purchased or allow investments in company stock and their sponsors, fiduciaries and advisors should carefully review for defensibility the current stock value, the purchase price and analysis supporting that purchase and other aspects of these investments of plan assets and take carefully documented action to prove the prudence and other appropriateness of the investment and continued retention of the investment in these assets.

Company Stock Investments Carry Special ERISA Risks

Purchases of company stock by an ESOP or other employee benefit plan can create a wide range of risks under the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA).  When making investment or other decisions under an employee benefit plan, the general fiduciary duty standards of ERISA § 404 generally require plan fiduciaries to act prudently and solely in the interest of participants and beneficiaries. Meanwhile, except in certain narrow circumstances and subject to fulfillment of ERISA § 404,  the prohibited transaction rules of ERISA § 406 among other things prohibits plan fiduciaries from causing the plan to engage in a transaction, if he knows or should know that such transaction is a direct or indirect:

  • Sale or exchange, or leasing, of any property between the plan and a party in interest;
  • Furnishing of goods, services, or facilities between the plan and a party in interest;  
  • Transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or
  • Acquisition, on behalf of the plan, of any employer security or employer real property in violation of section 1107 (a) of this title.

Stock Drops Create Rising Exposures For Plans Invested In Company Stock

Amid economic downturns or other situations where the stock value of company held by plans significantly lower than the price the plan paid for the stock, the Labor Department, plaintiffs in private lawsuits or both may bring “stock drop” or other lawsuits against the plan, its sponsor and its officers and board members, its fiduciaries and others for breach of fiduciary duties under these rules. See e.g., Enron v. Tittle, 463 F.3d 410 (5th Cir. 2006); In Re: BP p.l.c. ERISA Litig., No. 4:10-cv-4214 (S.D. Texas); Vivian v. Worldcom (N.D. Cal. 2002).  Since the sponsoring company is a party-in-interest of the plan, using plan assets to purchase company stock or other activities resulting in the inclusion of company stock among the plan assets held by the plan creates presumptions of impropriety that impose higher than usual burdens upon the plan, its sponsor and fiduciaries to prove the appropriateness of the transaction.  See e.g., Pfeil v. State Street Bank & Trust Co., 671 F.3d 585 (6th Cir. 2012).

The filing of stock drop cases tends to rise and fall in reflection to the economic times. Following the economic downturn in 2002, federal courts saw a surge in stop drop case challenges as well as Labor Department enforcement actions.  The number of these cases dropped as the economy improved later in the decade only to rise again between 2010 and the present in response to the current economic crisis.  

Tough Economic Times Fueled Stock Drops Creating Rising Risks & Enforcement

The latest economic downturn is fueling resurgence in these “stock drop” challenges.  Fifteen stop drop lawsuits were filed during 2010 and 2011.  Additional suits and Labor Department stop drop challenges have emerged this year.

In Griffin v. Flagstar Bancorp, Inc., No. 11-1497 (6th Cir. 2012), for instance, plaintiffs alleged various fiduciaries allegedly breached their duties under ERISA by allowing employer stock to be offered as a 401(k) plan investment option while the company was facing a precarious financial situation.  The Griffin court overruled the lower court’s dismissal of the plaintiff’s lawsuit.  The Court of Appeals held that the defendants offering of company stock to plan participants made ERISA’s “safe harbor” (Section 404(c)) provision for participant self-directed investments inapplicable.  The Sixth Circuit ruled “[a]fter reviewing the factual allegations in the complaint – which go far beyond documenting a simple drop in stock price to recite announcements from Flagstar itself, statements by analysts and financial media publications, and actions taken by Flagstar suggesting a precarious financial situation– we must conclude that the complaint raises a plausible claim for breach of fiduciary duty.”

In addition to private class action lawsuits like Griffin, plans holding company stock, their sponsors, owners, management and fiduciaries also need to be ready to defend against investigations and enforcement by the Labor Department, which often zealously investigates and takes enforcement action against plans, their fiduciaries, sponsors, company boards and management and others for losses to plan asset values resulting due to the investment or retention of investments by their plans in company stock. See also Labor Department Backs M&I Employees In Stock-Plan Suit.

Labor Department Suits Show Particular Risks For ESOPs

Over the past year, the Labor Department has been particularly aggressive in taking action when the value of company stock purchased or held by employee stock purchase plans or “ESOPS” drops significantly.  

  • Rembar

For instance, the purchase by the Rembar Inc. Employee Stock Ownership Plan (“Rembar Plan”) of all the stock of its sponsor, Rembar Inc. has landed the trust company that served as the Plan’s independent fiduciary and Rembar Inc.’s owner and Chief Executive Officer in hot water.

The Labor Department is suing Rembar Inc.’s Chief Executive Officer and owner, Frank Firor, First Bankers Trust Services Inc. and the Rembar Plan to recover losses that the Labor Department charges Rembar Plan participants suffered because the Rembar Plan paid too much when it purchased all of the stock of Rembar Inc.

Rembar Inc. manufactures and distributes precision parts made from refractory metals. The Labor Department lawsuit alleges that, in June 2005, First Bankers Trust Services allowed the Rembar Plan to purchase 100 percent of the company’s stock from Firor and Firor’s relatives for $15.5 million. A Labor Department investigation found that First Bankers Trust Services failed to comply with its duty to understand the valuation report that set the purchase price, identify and question assumptions in the report, and verify that the conclusions in the report were consistent with the company’s financial data. As a result of First Bankers Trust Services’ failure to comply with its fiduciary duties, the Labor Department claims the Rembar Plan overpaid for the stock and suffered losses.  The suit seeks, among other things, to recover jointly from First Bankers Trust Services and Firor all losses suffered by the Rembar Plan.

  • Maran

Similarly, the Labor Department also has filed an ERISA stock drop lawsuit against the Maran Inc. Employee Stock Ownership Plan (Maran Plan), First Bankers Trust Services Inc. and others to recover losses suffered by participants. 

According to the pleadings, First Bankers Trust Services was hired as an independent fiduciary and trustee in connection with the company’s ESOP to decide whether, and at what price, to purchase shares of Maran Inc. from majority shareholders.  The suit charges First Bankers Trust Services violated ERISA in 2006 when it approved the ESOP’s purchase of 49 percent of the outstanding stock of Maran Inc. for about $71 million, which was more than the fair market value. The Labor Department claims that as a result of the purchase of overvalued stock, the Maran Plan participants suffered significant losses.  The suit seeks to recover all losses and have First Bankers Trust Services enjoined from serving as a fiduciary to ESOP plans.  

  • Parrot

Likewise, the Labor Department in April sued in the U.S. District Court for the Northern District of California seeking to recover losses suffered by participants in the Parrot Cellular Employee Stock Ownership Plan (Parrot Plan).

The suit names as a defendant Dennis Webb, the principal owner of Entrepreneurial Ventures Inc. (EVI), which operates Parrot Cellular telephone retail stores in northern and central California, and is the sponsor of the Parrot Plan; EVI executives Matthew Fidiam and J. Robert Gallucci; Consulting Fiduciaries Inc., an Illinois company that served as the independent fiduciary and investment manager for the Parrot Plan in 2002 when the Parrot Plan bought 90 percent of EVI stock. 

According to the pleadings, the Parrot Plan paid for more than $28 million to buy approximately 90 percent of EVI’s stock in 2002. Around the same time as the stock purchase, EVI also set aside $4 million pursuant to a deferred compensation agreement with Webb and entered into a second executive compensation agreement with Webb for $12 million.

The Labor Department charges defendants allegedly violated ERISA by rejecting their fiduciary duties of loyalty and prudence to the plan, engaging in self-dealing, permitting or engaging in prohibited transactions, and failing to monitor the performance of the plan’s appraiser when they caused or permitted the Parrot Plan to purchase EVI stock for more than fair market value.  The suit also charges that Webb enriched himself by millions of dollars at the expense of the plan and its participants because a reasonable value for the company as of November 2002 was far less than the amounts the Parrot Plan paid for the stock and the total deferred compensation agreements entered into with Webb.

In addition to seeking the recovery of all losses to the Parrot Plan resulting from the above violations, the Labor Department’s suit seeks the disgorgement of unjust profits from Webb that he received from the two deferred compensation agreements and from his sale of EVI stock to the Parrot Plan.

Plans, Sponsors and Fiduciaries Must Act Continously To Manage Risks

These and other actions send a stong message for ESOP and other employee benefit plans, their fiduciaries and sponsors about the need to continuously and prudently evaluate and monitor the investment of plan assets in company stock,the analysis and decisions about whether to continue to keep and offer this stock under the plan, as well as the qualifications, credentials and conduct of the fiduciaries and others empowered to influence these decisions. The Labor Department’s statement in announcing the Parrot litigation sums up the messages from these cases. “Plan officials are required by law to manage the ESOP in a careful, prudent manner and to act solely to benefit the plan’s participants,” said Jean Ackerman, director of EBSA’s San Francisco Regional Office, which conducted the investigation. “This action underscores the department’s commitment to protect the benefits that employers promise to their employees.”  Plan fiduciaries, sponsors and their management, service providers and consultants participating in these activities need to both act with care and carefully document their actions to position to defend potential challenges.

Plans, their sponsors and fiduciaries also should ensure that appropriate steps are taken in selecting the fiduciaries, management and service providers responsible for administering or overseeing the administration of their plans, the selection of vendors, and other critical details.  Appropriate background checks and other credentialing should be done both at commencement and periodically.  Bonding and fiduciary liability insurance should be arranged and reviewed periodically along with their activities.  Documentation of these and other steps should be carefully created and preserved.

When and if a change in stock value or other event that could compromise the investment occurs, consideration should be given as to the responsibilities that such events create under ERISA.  As company leaders often have dual responsibilities to both the company and the plan, it is important that the company sponsoring the plan, its management and owners learn in advance how these responsibilities impact each other so that they are aware of the issues and have a good understanding of responsibilities and options as situations evolve.

 For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , , , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Confirm Qualified Plans Updated By Reviewing Against 2012 Required Plan Qualification Requirements Change List

December 9, 2012

Qualified plan sponsors, fiduciaries, administrators and advisors and other service providers should review the 2012 Cumulative List of Changes in Plan Qualification Requirements (2012 Cumulative List) in Notice 2012-76 to identify any required or recommended changes to promote continued fulfillment of applicable qualification requirements.

The Internal Revenue Service (IRS) publishes a cumulative list annually to guide plan sponsors and practitioners submitting qualifed plan determination letter applications for plans during the upcoming year.  The 2012 Cumulative Listinforms plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle C has been properly updated.  Specifically, the 2012 Cumulative List reflects law changes under the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109-280; the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery and Iraq Accountability Appropriations Act, 2007, Pub. L. 110-28; the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245; the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110-458; the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111-240; the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192; and the Moving Ahead for Progress in the 21st Century Act (MAP-21), Pub. L. 112-141. 

The 2012 Cumulative List sets forth guidance and regulations implementing these requirements and provides certain model amendment language. 2012 Retirement Plan Notices are published here.

The IRS intends that the 2012 Cumulative List will be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2013 and ending January 31, 2014.  In order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2012 Cumulative List including those enacted or effective after publication of the 2012 Cumulative List.  The list of changes in the Cumulative List does not extend the deadline for amending a qualified plan to comply with any statutory, regulatory, or guidance changes. 

Plans using 2012 Cumulative List will primarily be single employer individually designed defined contribution plans and single employer individually designed defined benefit plans that are in Cycle C, and § 414(d) governmental plans (including governmental multiemployer or governmental multiple employer plans) that choose to file during Cycle C.  Generally an individually designed plan is in Cycle C if the last digit of the employer identification number of the plan sponsor is 3 or 8.  In addition, the 2012 Cumulative List will be used by sponsors of defined benefit pre-approved plans (that is, defined benefit plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle described in Rev. Proc. 2007-44.

The IRS issued Notice 2012-76 in conjunction with the determination letter program for individually designed plans eligible for Cycle C.  The IRS is scheduled to accept determination letter applications for Cycle C individually designed plans from February 1, 2013 to January 31, 2014. In addition, the Service will start accepting opinion and advisory letter applications for defined benefit pre-approved plans beginning on February 1, 2013. The 12-month submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end on January 31, 2014. The 9-month submission period for mass submitters will end on October 31, 2013.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Reminder To Amend Health FSA Plan Terms To Include ACA $2500 Contribution Before 2013 Plan Year Begins

December 4, 2012

Employers and other health plan sponsors, insurers, and their administrators and service providers are reminded that the $2500 limit on pre-tax contributions to health flexible spending account plans under Internal Revenue Code section 125(i) takes effect on the first day of the 2013 plan year.   Notice 2012-40 makes clear that the IRS requires that this limitation be included in the plan document before the first day of the plan year for the plan to remain qualified under Code section 125.  Employers making this amendment likely wll want to draft this provision to preserve the option to adjust the limit as adjusted in the Code for post-2013 plan years.  Code section 125(i) provides for inflation adjustments the $2500.00 limit after 2013.

Most health flexible spending account plans already cap the annual contribution that employees can contribute to limit exposure to the “at-risk” requirements of current IRS regulations.   The at risk rule is a requirement imposed by IRS regulations that mandates that a health flexble spending account plan must make the full amount of the annual contribution of an employee available to the employee beginning with the first day of the plan year.  This provision has been highly contested as there is no express Code language authorizing or mandating this at risk requirement.  Along with providing guidance about the Code section 125(i) limit Notice 2012-40 also indicates that the IRS is reconsidering the need for and future of the at-risk requirement.

Health FSA Limit Change Just Tip of Iceberg

The new Code section 125(i) limit is only one of a plethora of statutory and regulatory changes impacting health benefit arrangements enacted by health care reform.  The effective date of these requirements spans from 2009 to 2017.  As implementation of these changes moves forward health plan design and administration requirements are changing rapidly as the Departments of Health and Human Services IRS, Department of Labor and state insurance agencies finalize arrangements and guidance governing the implementation and enforcement of the ACA health care reforms scheduled to take effect and to tweek guidance on provisions already effective under the law.  Employers and insurers now must get cracking to update their programs and cost estimates to comply with both existing and new guidance while keeping a close eye out for potential changes to ACA or other federal or state health coverage laws as the new Congress is expected to continue to discuss refinements or other changes when the new Congress begins work in January 2013.

What Should Employers Do To Cope With These & Other Health Plan Mandates?

Facing the operational and financial challenges of meeting these mandates, many business leaders continue report significant concern about what they should do to respond to these requirements.  For some practical steps that businesses confronting these issues should take to cope with ACA and other health plan responsibilities, check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine. To read the full article, see here.

Clearly in light of the new guidance, employers, insurers, health plan fiduciaries and their service providers need to act quickly to familiarize themselves with the guidance and make any need adjustments to their plans, communications, practices and budgets warranted by the new guidance and remain vigilent for and prepared to do the same with other guidance and reform proposals as it is released.

Beyond responding to the new guidance and other future developments, most health plan sponsors, insurers, administrators and other fiduciaries, and their vendors also should consider conducting this specific analysis and update of their health benefit programs in the context of a broader strategy.

In her 12-Steps Article, Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.”

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help their business manage future costs and responsibilities:

  1. Know The Cast Of Characters & What Hat(s) They Wear
  2. Know What Rules Apply, and How They Affect a Group Health Plan
  3. Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
  4. Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
  5. Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
  6. Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
  7. Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
  8. Select, Contract and Manage Vendors With Care
  9. Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
  10. Pack The Parachute and Locate The Nearest Exit Doors
  11. Get Moving On Compliance and Risk Management Issues
  12. Provide Input On Affordable Care Act Rules

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to watch and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

2013 Maximum Yearly PBGC Guaranteed Pension Benefit Amount To Increase Slightly In 2013

November 28, 2012

The yearly maximum guaranteed benefit for a 65-year-old retiree under the Pension Benefit Guaranty Corporation (PBGC) insurance program will increase to almost $57,500 in 2013, up from $56,000 in 2012.  Beginning in 2013, the PBGC announced November 27, 2012 that the maximum yearly guarantee for a 65-year-old retiree is $57,477.24. The increase is not retroactive.

The slight increase in the  guaranteed benefit is likely to be meaningful for the many pensioners receiving benefits under pension plans covered by the PBGC insurance program. This program insures guaranteed benefits amounts for pensioners of defined benefit plans covered by the PBGC insurance programs that are underfunded under the PBGC rules when terminated and otherwise meet program requirements.  Most retirees who get their pension from PBGC – almost 85 percent — receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee.

The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65, and lower for those who retire earlier or choose survivor benefits (see chart).  If a pension plan ends in 2013, but a retiree does not begin collecting benefits until a future year, the 2013 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.

The following chart shows the 2013 annual and monthly maximum benefit guarantees for retirees from ages 45 to 75. The maximum amount is lower for retirees who begin getting benefits at ages below 65, reflecting the fact that younger retirees receive more monthly pension checks over a longer lifetime. The maximum amount is higher for benefits starting at ages above 65, because older retirees receive fewer monthly pension checks over their expected lifetimes.

PBGC Maximum Monthly Guarantees for 2013
Age Annual Maximum Monthly Maximum Monthly Joint and 50% Survivor Maximum*
75 174,730.80 14,560.90 13,104.81
74 158,867.04 13,238.92 11,915.03
73 143,003.40 11,916.95 10,725.26
72 127,139.64 10,594.97 9,535.47
71 111,275.88 9,272.99 8,345.69
70 95,412.24 7,951.02 7,155.92
69 85,641.12 7,136.76 6,423.08
68 77,019.48 6,418.29 5,776.46
67 69,547.44 5,795.62 5,216.06
66 63,225.00 5,268.75 4,741.88
65 57,477.24 4,789.77 4,310.79
64 53,453.88 4,454.49 4,009.04
63 49,430.40 4,119.20 3,707.28
62 45,407.04 3,783.92 3,405.53
61 41,383.56 3,448.63 3,103.77
60 37,360.20 3,113.35 2,802.02
59 35,061.12 2,921.76 2,629.58
58 32,762.04 2,730.17 2,457.15
57 30,462.96 2,538.58 2,284.72
56 28,163.88 2,346.99 2,112.29
55 25,864.80 2,155.40 1,939.86
54 24,715.20 2,059.60 1,853.64
53 23,565.72 1,963.81 1,767.43
52 22,416.12 1,868.01 1,681.21
51 21,266.52 1,772.21 1,594.99
50 20,117.04 1,676.42 1,508.78
49 18,967.44 1,580.62 1,422.56
48 17,817.96 1,484.83 1,336.35
47 16,668.36 1,389.03 1,250.13
46 15,518.88 1,293.24 1,163.92
45 14,369.28 1,197.44 1,077.70
* Both spouses the same age

The PBGC insurance program is funded through insurance premiums paid by covered plans.  In recent years, the number of underfunded plans has increased due to a lagging economy, declines in market performance and other factors.  The demands on the PBGC insurance program prompted Congress to increase premiums, modify pension funding rules and enact various other reforms in an effort to shore up the PBGC insurance program.  The PBGC also has undertaken a number of regulatory and operational reforms.  Companies sponsoring plans covered by the PBGC insurance program should review their existing funding and insurance requirements to ensure that they are in compliance with existing rules and taking advantage of  the most favorable opportunities under these rules.  In addition, companies sponsoring defined benefit plans govered by the PBGC insurance program and/or the Internal Revenue Code and Employee Retirement Income Security Act’s minimum funding rules or entities that are  part of commonly controlled or affiliated groups of companies, purchasing stock or assets from such company groups or lending to or investing in such entities should evaluate the funding status of these programs and the responsibilities and liability exposures that might impact their interests.

For additional information, see PBGC’s fact sheet “Pension Gurantees” and for information about the benefits guaranteed by the PBGC, see ”Making Sense of the Maximum Insurance Benefit.”

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Rare Court Order Telling Union To Stop Filing Grievances Example Of Employer Risks When Caught Between Competiting Unions

November 23, 2012

A district court judge in Washington has ordered the International Longshore and Warehouse Union (ILWU) to stop processing grievances and filing lawsuits against a competitive union, the International Brotherhood of Electrical Workers (IBEW), and, pending the outcome of further litigation, employers assigning work of plugging in, unplugging and monitoring refrigerated shipping containers at the Port of Portland to IBEW.  The litigation between the two competing unions shows how employers can get caught in risky, no-win liability exposures as a result of power battles between competing unions over the right to represent workers performing services for the employers.

The injunctive order steps from a dispute between both unions over which union is entitled to represent a group of workers. Both unions claim the work, citing various contracts and collective bargaining agreements. In August 2012, the National Labor Relations Board issued a decision concluding that the employees represented by the IBEW are entitled to the work. Despite that ruling, the ILWU and two of its locals have continued to file and process grievances against employers serving as carriers at the port, seeking lost wages for work assigned to the IBEW. The ILWU also filed a claim against the IBEW in federal court under the Labor-Management Relations Act.

In granting the petition for injunctive relief from the NLRB’s Regional Office in Seattle late Wednesday, November 22, 2012, U.S. District Judge Michael H. Simon found that, by filing grievances and seeking enforcement of subsequent awards despite the Board’s decision, the ILWU had the unlawful secondary object of pressuring shipping carriers to stop doing business with the Port of Portland. He enjoined the union from filing, processing, maintaining, prosecuting, or threatening grievances or new lawsuits in the matter against the union as well as the carrier employers. With respect to the dispute with IBEW, the court ruled that the continued filing of the grievances against the IBEW constituted an unfair labor practice because the NLRB ruling already had recognized the IBEW as the authorized representative of the covered employees performing the work.

Concerning his decisions to also bar the ILWU from suing and filing charges against the employing carriers that have been caught in the war between the two unions, the Court issued a temporary injunction pending the outcome of the litigation. The court noted that the question of whether the NLRB ruling prohibited the carrier employers from subcontracting work covered by the NLRB order could not be permanently resolved based in the facts on the record, but that the IBEW had produced sufficient evidence of likely success on merits and irreparable harm to justify the court’s issuance of a temporary injunction.

While federal courts rarely enjoin unions under the National Labor Relations Act, the federal court in this matter found in light of the NLRB ruling in favor of the other union, the court’s decision in favor of the IBEW allows the IBEW to move forward for the time being as the  representative of the workers.  Concurrently, the court’s decision allows the employers caught between the two unions to continue operations for the time being by assigning work to the IBEW workers unless and until the ILWU proves its entitlement to that work.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Board Certified Labor & Employment attorney and Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

Ms. Stamer is widely known for her extensive and creative knowledge and experienced with these and other labor and employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , | Permalink
Posted by Cynthia Marcotte Stamer

IRS OKs Retirement Plans Allowing Plan Loans & Hardship Withdrawals To Hurricane Sandy Victims

November 23, 2012

Retirement plan fiduciaries of plans covering participants impacted by Hurricane Sandy seeking loans or hardship withdrawals received some welcome guidance from the Internal Revenue Service (IRS). 

The IRS announced November 16 that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Sandy and members of their families. Read News Release IR-2012-93. For more information, read Announcement 2012-44.

Plan fiduciaries dealing with requests or  wishing to offer this option to participants affected by Hurricane Sandy should check this guidance along with existing plan terms and associated loan and hardship withdrawal rules to confirm that  their plan terms contain  all necessary provisions to use this guidance and their plan’s loan or  hardship withdrawal provisions before moving forward.  Assuming that the plan contains appropriate provisions and the necessary requirements are met,the guidance says plan fiduciaries can  authorize these requests.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

Leave a Comment » | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

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