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Konica Minolta Suit Warns Employers To Carefully Manage Separation and Severance Program Design and Administration

November 10, 2026

An ongoing class action lawsuit against Konica Minolta Business Solutions U.S.A., Inc. alerts employers offering severance or separation pay to carefully review the design, documentation, administration, and application of their severance and separation pay practices to avoid getting nailed with unexpected liabilities and litigation and enforcement costs. Knowing and properly managing these arrangements is particularly critical for employers contemplating individual terminations, job restructurings, reductions in force, relocations, mergers, acquisitions, and other workforce or business restructuring that likely to trigger job terminations or demotions.

Cezus v. Konica Minolta Business Solutions U.S.A., Inc., No. 2:21-cv-00792 (D.N.J.), is an example of a multitude of cases that demonstrate that undocumented, poorly drafted or inconsistently administered severance arrangements can expose employers and their leaders responsible for administering these programs to costly litigation and potentially significant benefit liabilities.

The litigation also highlights an often-overlooked compliance concern: Employer severance and separation pay practices and arrangements generally constitute employee welfare benefit plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) unless designed and administered to qualify as exempt. See ERISA § 3(1), 29 U.S.C. § 1002(1)⁠; 29 C.F.R. § 2510.3-2(b)⁠ (addressing severance pay arrangements treated as employee welfare benefit plans). These practices and risks may arise from oral promises or reassurances made to groups of employees; a pattern of paying separation or severance to groups of terminated employees; commitments made in employee handbooks or policies; employment or other agreements with various employees; retention, merger or acquisition or other business transaction agreements; and various other actions. Programs falling under ERISA benefit from preemption of state law mandates and damages but must comply with ERISA’s plan document, fiduciary duty, claims and appeals, reporting and disclosure and other requirements. Employers establishing these arrangements should use care to understand the character of their separation pay arrangements and to document and arrange for their use and administration to manage the applicable compliance responsibilities and legal risks.

When ERISA applies, employers and plan administrators must comply with applicable plan documentation, disclosure, fiduciary responsibility, benefit claims and appeals, and other ERISA requirements. ERISA will treat sponsoring employer, or leaders responsible for interpreting and administering these arrangements as fiduciaries required to carry out these responsibilities in accordance with ERISA’s prudence, exclusive benefit and other fiduciary , claims and appeals

These obligations can apply even when an employer considers its severance arrangement merely an internal human resources policy.

Konica Minolta Litigation Challenges Denial of Severance Following Office Relocation

In Cezus v. Konica Minolta Business Solutions U.S.A., Inc., No. 2:21-cv-00792 (D.N.J.), former employees challenged the denial of severance benefits following Konica Minolta’s decision to relocate positions from Windsor, Connecticut, to Ramsey, New Jersey.

According to the employees, the employer structured the relocation in a manner designed to accomplish a substantial workforce reduction without paying severance benefits to employees unwilling or unable to relocate.

Employees whose positions were transferred were offered continued employment at the New Jersey location. Those who declined the transfer were terminated without severance based on a plan provision excluding employees who refused offers of other employment within the company.

The employees contend that the relocation was, in substance, a reduction in force triggering severance eligibility under the governing plan. Konica Minolta disputes those allegations and maintains that the benefits were properly denied under the plan’s terms.

On June 23, 2026, the U.S. District Court for the District of New Jersey certified a class of employees challenging the denial of benefits. The district court concluded that common questions concerning the relocation, the employer’s application of the severance plan, and the characterization of the employment terminations supported classwide adjudication.

On November 6, 2026, the United States Court of Appeals for the Third Circuit agreed to consider Konica Minolta’s interlocutory appeal challenging class certification.

The Third Circuit’s decision to hear the appeal does not resolve the merits of the employees’ claims or establish that Konica Minolta improperly denied benefits. Nevertheless, the litigation illustrates the substantial exposure employers can face when the design or administration of severance arrangements produces disputes involving a group of similarly situated employees including the substantial likelihood of class action litigation, Employee Benefit Security Administration investigation or enforcement, or both.

ERISA Often Regulates Severance, Separation, Termination or Other Arrangements Paying Cash Upon Employment Termination

A critical starting point for employers is recognizing that ERISA applies to many severance, separation pay and other arrangements through which employers pay employees cash or other benefits upon termination whether or not the employer intended to establish a plan subject to ERISA when it established the arrangement.

The applicability of ERISA to a termination pay arrangement has several material consequences for these arrangements, the employers that establish them, and the employers or company officials responsible for their administration. For instance, when a severance arrangement is an ERISA plan, the employer must ensure that the arrangement is documented in accordance with ERISA’s plan document requirements, communicated through a summary plan description, and administered in accordance with ERISA’s fiduciary responsibility, claims and appeals and other requirements. If the arrangement subject to ERISA is considered a “pension” versus “welfare” plan, ERISA’s coverage, vesting and funding rules also may apply. Also, where ERISA applies the written plan document, not the separation agreement handed to the departing employee, generally determines what the employer when the benefits are paid, what an employee must be required to agree to or d before qualifying to receive the payments; and the enforceability of conditions included in the separation agreement. Employers that fail to write release and covenant conditions into the plan itself risk being unable to enforce them if these terms are not properly documented. Employers must also avoid separation terms that federal or state law prohibits, some of which create independent liability rather than merely failing to bind the employee. At the same time, because ERISA generally preempts state laws regulating employee benefit plans, coverage by ERISA often insulates the employer and those responsible for administering these programs from state employment law or other rules that restricting the terms of these arrangements, exemplary damage awards that state employment, contractual or other laws often authorize for disputes arising from these arrangements, and state law restrictions that otherwise would restrict waivers, releases or other terms allowed under ERISA but prohibited by state law.

Arrangements Providing Payments For Employment Termination Or Unemployment Presumptively Regulated As ERISA Plans

ERISA generally regulates arrangements that defer or pay benefits to termination of employment or beyond as either pension or welfare benefit plans.

ERISA Section 3(1), 29 U.S.C. § 1002(1)⁠, includes certain plans, funds and other arrangements providing benefits in the event of unemployment within the definition of an employee welfare benefit plan. However, certain arrangements may be regulated under the more burdensome requirements ERISA applies to pension plans. Since pension plans are subject to additional requirements, it is important for an employer to know both if ERISA applies to the arrangement and if so, to understand if the severance arrangement is properly classified as a welfare versus a pension plan for ERISA purposes.

Courts have read ERISA’s definition of an “employee benefit plan” broadly enough to reach most employer promises to pay severance or termination pay. Consequently, employers should not assume that an arrangement escapes ERISA merely because the employer doesn’t consider or label it an ERISA plan; the commitment to provide the termination payment or other benefit upon separation is made in an employment agreement, written or unwritten severance policy, business transaction document, separation agreement, executive benefit, or payroll practice.

Arrangements Subject To ERISA

The Second Circuit has observed that the employee benefit plan definition “has been held to apply to most . . . employer undertakings or obligations to pay severance benefits.” Okun v. Montefiore Med. Ctr., 793 F.3d 277 (2d Cir. 2015) (quoting Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 75 (2d Cir. 1996)). Arrangements found to be plans include the following:

Written severance policies. In Okun, a long-standing written policy was a plan where, among other features, employees with fifteen years of service were entitled to an automatic review of their severance amount by the medical center’s president.
Executive packages tied to an acquisition. Bogue v. Ampex Corp., 976 F.2d 1319 (9th Cir. 1992), involved severance for ten top executives that required the administrator to make discretionary determinations about whether post-acquisition employment was substantially equivalent.
Combined termination and change-in-control plans. In Petersen v. E.F. Johnson Co., 366 F.3d 676 (8th Cir. 2004), a plan paying benefits on termination without cause, including termination as a result of a change in control, required case-by-case eligibility review.
Promises to a single employee. Williams v. Wright, 927 F.2d 1540, 1545 (11th Cir. 1991), held that “a plan covering only a single employee, where all other requirements are met, is covered by ERISA,” and that payment from general assets does not defeat plan status. See also Biggers v. Wittek Indus., Inc., 4 F.3d 291, 297 (4th Cir. 1993).
State-mandated severance. Simas v. Quaker Fabric Corp., 6 F.3d 849 (1st Cir. 1993), held ERISA preempted Massachusetts’ “tin parachute” statute, which required graduated severance for employees terminated around a change in control.

However, federal precedent recognizes certain payments made upon termination fall outside ERISA. For instance, under the Supreme Court’s decision in Fort Halifax Packing Co. v. Coyne⁠, 482 U.S. 1 (1987)⁠, for example, a one-time payment obligation that does not require an ongoing administrative scheme does not necessarily constitute an ERISA plan.

Fort Halifax’s one-time, plant-closing payment, Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987), is not the only severance-type obligation courts have placed outside ERISA § 3(1). The test is whether the employer’s undertaking requires an ongoing administrative scheme, not what the payment is called. Courts have found no plan where an individually negotiated employment contract called for severance computed mechanically on termination, with no ongoing discretionary analysis required, Delaye v. Agripac, Inc., 39 F.3d 235 (9th Cir. 1994). The same is true of a “golden parachute” triggered by a single change-in-control event, whether adopted for a group of senior executives, Fontenot v. NL Industries, Inc., 953 F.2d 960 (5th Cir. 1992), or negotiated with one executive, Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d 254 (8th Cir. 1994). Courts have reached the same result for a one-time “stay” bonus and severance payment tied to a facility closing, Velarde v. PACE Membership Warehouse, Inc., 105 F.3d 1313 (9th Cir. 1997). The same reasoning supports treating a negotiated settlement agreement as a contract rather than a plan where it pays a fixed sum to resolve disputed liabilities between the employer and a particular employee. Such an agreement compromises existing claims rather than establishing a program to provide benefits on account of unemployment.

Payments made because of the federal Worker Adjustment and Retaining Act (“WARN Act”) stand on similar footing. The Department of Labor has stated that neither the Act nor the regulations recognize the concept of pay in lieu of notice, U.S. Dep’t of Labor, Employer’s Guide to Advance Notice of Closings and Layoffs. An employer that pays back pay and benefits for the notice shortfall is satisfying or reducing its statutory liability under 29 U.S.C. § 2104 rather than maintaining a benefit program, much like the statutorily mandated plant-closing payment in Fort Halifax. Where affected employees instead remain on payroll through the notice period, their continued pay fits within the payroll-practice exclusion in 29 C.F.R. § 2510.3-1(b), which Massachusetts v. Morash, 490 U.S. 107 (1989), applied to vacation pay. These outcomes depend on the arrangement’s actual features. An employer that folds WARN-related or settlement payments into a broader severance program with eligibility discretion, case-by-case determinations, or payments over an extended period risks creating the very ongoing administrative scheme that triggers ERISA coverage, as in Simas v. Quaker Fabric Corp., 6 F.3d 849 (1st Cir. 1993).

Equally important to knowing if ERISA applies to an arrangement is knowing whether ERISA considers an arrangement to pay an employee upon unemployment or termination of employment a “welfare benefit plan” or a “pension plan.” The vast majority of severance arrangements maintained by employers qualify as welfare benefit plans under the three safe-harbor criteria adopted by the Department of Labor for determining whether a severance arrangement is regulated by ERISA as a welfare benefit plans in 29 U.S.C. § 1002(2)(B) and 29 C.F.R. § 2510.3-2(b), as summarized in Advisory Opinion 1995-28A:

the severance payments are not contingent, directly or indirectly, on the employee’s retiring;
the total payments do not exceed the equivalent of twice the employee’s annual compensation during the year immediately preceding termination of service; and
all payments are completed within 24 months after termination of service or, for an employee terminated in a limited program of terminations, within the later of 24 months after termination or 24 months after the employee reaches normal retirement age.

Employers applying these criteria should keep in mind that the two-times measure is not limited to final base pay. “Annual compensation” means the total of all compensation, including wages, salary, and any other benefit of monetary value, whether paid in cash or otherwise, for the year before termination. The Department has also taken the position that benefits must be paid within 24 months of the event giving the employee the right to a benefit, Advisory Opinion 1992-03A. An arrangement that meets all three criteria is treated as a welfare plan, provided it is a “plan” at all under Fort Halifax. As a welfare plan, it is not subject to Parts 2 and 3 of Title I (participation, vesting, and funding) but remains subject to Parts 1, 4, and 5 (reporting and disclosure, fiduciary responsibility, and administration and enforcement), Advisory Opinion 1981-55A. Failing any criterion, including the retirement-contingency test, removes the arrangement from the welfare benefit plan safe harbor, Advisory Opinion 1981-08A, but does not automatically make it a pension plan. The Department has noted that the regulation’s preamble does not exclude the possibility that an arrangement outside the criteria may still avoid pension-plan status, Advisory Opinion 1999-01A. Such an arrangement must be analyzed under ERISA § 3(2)(A), which asks whether it provides retirement income or results in a deferral of income to termination of employment or beyond. A pension-plan finding would bring vesting, funding, and other requirements that severance programs are rarely designed to meet. Arrangements that exceed two times annual compensation, extend payments beyond 24 months, or favor retirement-eligible employees, such as some executive and change-in-control packages, warrant particular review.

Since whether a particular severance arrangement is governed by ERISA and where ERISA applies, the resulting consequences vary depending on whether the arrangement is a welfare benefit plan or a pension plan, depends on its design, operation, and the applicable legal standards and the consequences of these classifications materially affect the responsibilities of the adopting employer and the arrangement itself, employers generally should obtain advice from legal counsel with relevant ERISA experience about the applicability of ERISA and its implications before making and when administering these pay upon termination or unemployment arrangements.

ERISA Requires Written Plan Document and More

Coverage of a severance arrangement has material consequences for the adopting employer and those that administer the arrangement extending well beyond merely determining who is eligible and how much severance an employee should receive. Among other things, sponsors and administrators of ERISA-covered severance arrangements generally must address the following requirements.

Written Plan Documents and Clear Eligibility Provisions

ERISA Section 402, 29 U.S.C. § 1102⁠, requires employee benefit plans to be established and maintained pursuant to written plan documents that among other requirements, must identify the named fiduciary or a procedure for identifying fiduciaries, provide procedures for amendment, and specify the basis on which payments are made.

For severance plans, carefully drafted plan documents should address eligibility, covered termination events, reductions in force, relocations, job elimination, voluntary departures, offers of alternative employment, exclusions, benefit formulas, release of claims and other payment conditions, and amendment or termination rights.

Ambiguous provisions can invite disputes over whether a particular employee conduct or misconduct, restructuring, reassignment, relocation or other circumstance triggers severance eligibility or ineligibility. Similarly, plan documentation should be clear regarding if and when health or other employee benefits, fringe benefits or other perks of employment will or will not continue during periods for which severance pay is provided.

For employers desiring to condition payment of benefits on the employee releasing claims, careful crafting of the plan to clearly define the waiver requirements and the waiver terms itself also is critical to ensure compliance with relevant ERISA, Older Worker Benefit Protection Act and other requirements to promote enforceability as intended by the sponsoring employer and avoid creating age discrimination or other unintended liability risks.

Fiduciary Responsibilities and Prudent Plan Administration

Where an arrangement is regulated by ERISA, ERISA, rather than state employment or other law generally will govern its administration.

ERISA Section 404, 29 U.S.C. § 1104⁠, generally requires plan fiduciaries to act prudently, loyally, and in accordance with governing plan documents insofar as those documents are consistent with ERISA.

Employers should distinguish between business or settlor decisions concerning whether to establish, amend, or terminate a severance plan and fiduciary decisions concerning the administration of an existing ERISA plan.

While an employer generally may make legitimate business decisions concerning workforce restructuring, individuals exercising discretionary authority over plan administration or benefit determinations may be acting as ERISA fiduciaries.

Consequently, administrators should not treat the employer’s preferred business outcome as a substitute for a faithful interpretation and application of the plan’s terms. Employers should specifically appoint specified individuals to serve as the responsibility for administering severance arrangements in accordance with ERISA’s fiduciary responsibility and other requirements. Termination decisions made by the employer should be made separately from decisions regarding severance benefit eligibility made by officials appointed to serve as the fiduciaries responsible for administering the severance plan. Decisions made by the severance plan fiduciaries must be made prudently in accordance with the terms of the plan terms and for the exclusive benefit of plan participants and beneficiaries.

Benefit Claims and Appeals Procedures

ERISA Section 503, 29 U.S.C. § 1133⁠, and the Department of Labor’s claims procedure regulation, 29 C.F.R. § 2560.503-1⁠, impose requirements for processing claims for benefits under covered plans.

These generally include procedures for making benefit claims, timely and adequate notices of adverse benefit determinations, disclosure of the specific reasons and relevant plan provisions supporting denials, and a reasonable opportunity for full and fair review.

The employer or individual or committee named as the fiduciary responsible for administering a severance plan that denies severance benefits without following the applicable claims and appeals requirements can create additional litigation exposure and potentially undermine otherwise available defenses.

Summary Plan Descriptions, Disclosures, and Reporting

ERISA Sections 102 and 104, 29 U.S.C. §§ 1022⁠ and 1024⁠, generally require covered plans to provide appropriate participant disclosures, including summary plan descriptions and summaries of material modifications when applicable.

Employers should also determine whether annual Form 5500 reporting or an applicable exemption applies to their severance plans.

Plan documentation, participant communications, and actual administrative practices should be coordinated to avoid conflicting descriptions of eligibility and benefits.

Enforcement, Benefit Claims, and Fiduciary Liability

ERISA Section 502, 29 U.S.C. § 1132⁠, provides civil enforcement mechanisms that may permit eligible participants and beneficiaries to pursue unpaid benefits, enforce plan rights, or seek other appropriate relief.

Depending on the facts and legal basis of the claim, litigation can also involve requests for equitable relief, attorneys’ fees, statutory penalties for certain disclosure failures, and remedies for fiduciary breaches.

The potential for claims involving numerous employees makes uniform plan interpretation and careful administration especially important.

Employers and Business Leaders May Pay High Cost For Bungled Responsibilities

Bungled severance arrangement design, documentation or administration can be costly for employers and the business leaders responsible for the design and administration of these programs.

Along with from compromising the ability of employers to enforce intended limitations on payments, enforce releases or other conditions of the program, sponsoring employers and their leaders responsible for administering these arrangements risk:

Department of Labor Employee Benefit Security Administration investigations and enforcement actions for wrongful denial of benefits, breach of fiduciary duty, and other ERISA breaches seeking damages, penalties and enforcement costs; and
Class action and other lawsuits by employees seeking damages plus attorneys’ fees and other enforcement costs for breaches of ERISA, the Age Discrimination in Employment Act or other laws.

Business leaders involved in or with discretionary authority over the design or administration of these programs also could be at risk for personal liability where the mishandled responsibilities are found to constitute fiduciary breaches.

Practical Steps Employers Should Take Now

Employers and individuals within their organizations charged with administering these arrangements concerned about positioning their organization to maximize their companies’ flexibility to make workforce changes without unanticipated separation pay liabilities and costs should reassess their severance and separation pay practices before the next workforce action or change. Recommended actions include:

Inventory existing arrangements. Identify formal severance plans, executive separation arrangements, employee handbook promises, change-in-control programs, and established severance practices. Determine which arrangements are governed by ERISA and which may be subject to other legal requirements.
Review plan drafting. Confirm that eligibility, exclusions, covered terminations, alternative employment offers, relocation requirements, and benefit formulas are clearly defined and reflect intended business practices.
Evaluate ERISA compliance. For covered plans, confirm that written plan documents, fiduciary designations, summary plan descriptions, claims and appeals procedures, and applicable reporting obligations are optimally addressed. To the extent ERISA compliance is deficient or suboptimal, prompt corrective action should be taken.
Review restructuring decisions against existing plan terms. Before implementing layoffs, relocations, consolidations, or position eliminations, determine whether the proposed actions may trigger severance obligations. Avoid relying solely on labels such as “voluntary resignation” or “transfer refusal” without examining the actual facts and governing provisions.
Train decision-makers and document determinations. Ensure human resources personnel, management, and plan fiduciaries understand their respective roles and responsibilities. Maintain contemporaneous records supporting eligibility determinations, benefit calculations, and claim decisions.
Coordinate severance arrangements with other applicable laws. Depending on the circumstances, severance arrangements may also implicate the WARN Act, the health benefit coverage continuation rules of the Consolidated Budget Reconciliation Act (“COBRA”), ERISA and federal tax laws regarding pension and profit sharing plan complete or partial terminations, securities, tax and other considerations regarding equity based pay, federal and state discrimination laws, wage payment requirements, tax rules, and legal requirements governing releases of employment claims and other requirements.

The Bottom Line

Severance and separation pay arrangements are not merely discretionary human resources practices. They may create enforceable benefit obligations and trigger significant ERISA and other compliance responsibilities.

The Konica Minolta litigation demonstrates how a dispute concerning the characterization of a workforce restructuring and the application of a severance plan exclusion can develop into potentially expensive class action litigation.

Employers should proactively review their severance plan documents and practices, ensure that benefit determinations are made in accordance with governing terms, and confirm that ERISA-covered programs comply with applicable fiduciary, claims, appeals, disclosure, and other requirements.

Careful drafting before a restructuring and disciplined administration when employment ends can significantly reduce the risk of costly disputes over severance eligibility.

For Help or More Information

The author of this update, Cynthia Marcotte Stamer has decades of experience advising and representing employers on these and other workforce, compensation and benefit concerns.

Well-known for her knowledge, training and publications on these concerns, Ms. Stamer also is nationally recognized for her extensive publications, training and advocacy on health and other employee benefits matters,

For more information about securing a copy of the recording, attending the upcoming or other briefings, or other health or other employee benefits, workforce, health care or other training, resources, or services, see http://www.solutionslawyer.com orcontact Ms. Stamer via e-mail or via telephone at (214) 452 -8297.

About the Author

The author of this update, Cynthia Marcotte Stamer, has decades of experience advising and assisting employers on the design, audit, enforcement and defense of employment, severance and other employee benefits, and other workforce, employee benefits, and operational risk management and compliance.

An American College of Employee Benefits Counsel and a Martindale-Hubble “AV-Preeminent” (Top 1%) attorney and advisor board certified in labor and employment law by the Texas Board of Legal Specialization peer celebrated as “Top Rated Lawyer” and “LEGAL LEADER™ “Top Rated Lawyer” and “Best Lawyer” for her work in ERISA & Employee Benefits Law, Health Care Law, Labor and Employment Law, and Business and Commercial Law, Ms. Stamer has decades of experience advising and defending employers, employee benefit plans and their fiduciaries, debtors in possession, bankruptcy trustees and receivers, and others about employment termination, severance pay, settlement negotiations and other aspects of planning, implementing and defending single or mass employment terminations and other workforce, employee benefit and business concerns in a wide range of contexts Her experience includes advising employers, employee benefit plan fiduciaries and others about the planning, design, documentation, interpretation, administration and defense of these and other employment, employee benefit and other practices, as well as conducting audits and investigations, designing and updating compliance and risk management programs, responding to government investigations, conducting transaction, governance, and other due diligence, and assisting with other legal and operational compliance and risk management and legislative and regulatory affairs. She is available to assist your organization in assessing the impact of these developments and navigating the compliance and strategic steps that follow.

In addition, Ms. Stamer also is widely celebrated for her leadership in the American Bar Association (“ABA”) and a multitude of other policy, professional, civic, educational, community and other organizations. Ms. Stamer currently or previously served as the American Bar Association (“ABA”) Joint Committee on Employee Benefits (“JCEB”) leadership council, Scribe leading the Department of Health and Human Services annual agency meeting and a representative to other annual agency meetings, speaker, author and faculty; the ABA International Section International Employment Law Committee and International Life Sciences Committee Chair; the ABA Tort Trial and Insurance Practice Section Medicine and Law Committee Chair, SCOPE member, and Employee Benefits and Worker’s Compensation Committees Vice Chair; the ABA Health Law Section Managed Care & Insurance Interest Group Chair and Risk Management Interest Group Vice Chair; the ABA RPTE Employee Benefits & Other Compensation Group Chair and Welfare Benefit, Fiduciary Responsibility, and Plan Terminations and Transactions Committees Chair; the North Texas Health Care Compliance Professionals Association Vice President and Executive Director; a Southwest Benefits Association Board Member, Treasurer and Continuing Education Committee Chair; a SHRM Consultants National and Region IV Board Chair; a WEB National Board Member and Dallas Chapter President; the National Kidney Foundation of North Texas Board Member and Compliance Chair; the Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency Board President; a North Texas United Way Long Range Planning Committee Member; and in many other leadership roles in a broad range of other professional and civic organizations.

Along with these activities, Ms. Stamer also has earned national recognition for her authorship of thousands of highly regarded works, presentations as a knowledgeable speaker, testimony and other input of regulators and legislators, and media interviews on health and other benefits, human resources and other workforce, health care, insurance, data privacy and security and other related concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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Improve HR Value To Company By Making HR A Performance Rather Than People Department

August 25, 2015

Human resources and other management leaders searching for ways to take their businesses from good to great should critically evaluate their workforce recruitment, management, compensation and benefit practices are properly designed to support business success or inappropriately detract from performance. When designing and administering the human resources and other workforce processes for any business, human resources managers and consultants and the business leaders they support should stop thinking of and administering human resources as the “people” department and start thinking and running the department as the “performance management” department.

The primary responsibility of management is to define the business goals and manage its people and other details to accomplish the goal. Businesses leaders determined to succeed usually take steps to promote achieve desired well-defined goals by adopting detailed implementation plans that depend upon properly qualified workers reliably delivering the required performances their business needs to succeed.

As businesses technically only act through the performances of their people, everything that goes right or wrong or better or worse in a company ultimately depends on what its people do, when and how. Human resource and associated workforce performance both are key drivers of business performance and costs as well as major contributors to liabilities and expense. even the most promising businesses experiences difficulty succeeding unless its people reliably perform as needed to implement the business plan. While businesses can struggle or fail if management chooses a poor business path, even the most promising businesses will experience difficulty achieving success if it can’t get its people to reliably implement the business plan. Therefore, effective workforce management critically impacts every company’s performance and ultimately, its success.

As with any other company resource used in its operations, management must manage workforce resources to meet the needs of the business. Management and its people must understand that the “people department” exists to drive business performance not to maximize employee satisfaction. When recruiting, hiring and promoting workers, business leaders should and must objectively define the tangible education, experience, skills, compensation and other employment terms to fit management expectations of the business needs. However hiring someone who has the capability of doing the job is only part of the equation. Getting the employee to actually do the job as desired for the compensation and other benefits of employment offered by the business is where management comes in to play.

While it’s great when the business needs align with the needs of its people, the management has a duty to put the success of the business ahead of employee satisfaction when these needs do not align. While management can admire the success realized by the management by survey human resource consulting businesses in promoting the idea that management will be unable to hire sufficient employees unless it restructures its business operations and workforce expectations to match survey responses of Gen-X and Millennial workers, the business failures and setbacks of the automobile, steel, airlines and numerous other businesses clearly document the perils to the business and its workers that the business failures and setbacks of the automobile, steel, airlines and numerous other businesses when management pander to compensation or other expectations of workers at the expense of responsible management. Therefore, while management generally should consider the market competitiveness of the company’s employment, compensation, benefits and culture, the implications on the company’s ability to recruit, retain and motivate the workforce talent and performances needed to best operate the business with the least management effort, expense and liability ultimately must determine whether and to what extent to accommodate a particular worker or group of worker’s demands or expectations about hours of work, compensation, benefits and other job satisfaction issues on business performance.

Once management defines the position, its required qualifications and performance requirements, compensation, benefits and other terms based on the business needs of the company, management helps qualified candidates perform their best by clearly defining and communicating management expectations. Management should make clear what the job is, how performance will be judged and the compensation and other benefits and opportunities of the job.

Thus, while surveys and other invitations for members of the team to provide input and feedback can provide valuable insights to management where the performance needs of the business might be advanced by such input, management generally should use care not to send mixed messages by inviting input by workers on matters which management already has determined the course of action required to meet the business needs. Similarly, while management can and should design and administer workforce policies and management to include appropriate flexibility to allow employees flexibility in the performance of their assigned duties, compensation, or other terms of employment within the parameters established by management, unless legally required, management generally should be cautious about accommodating workers’ requests for special treatment or accommodation of the employee’s preferences or needs do not fit the business performance needs determined by management. Likewise, teaming does not mean the team doesn’t have a head coach. While input from employees has a valuable role in businesses, failing to clearly define the parameters and expectations within which employees are expected to perform, inviting input on decisions management already decided, or tolerating diversity in performance where the business needs uniformity undermines the effectiveness of the business and the performance of the worker by confusing or misdirecting the workers.

While occasionally the unique skills and talents of a particular worker may be so valuable that the business needs justify accommodating his demands for prima donna treatment, management should carefully weigh the costs of accommodation of these preferences. Unfortunately, management frequently wastes significant time, money and legal fees apparently qualified candidates that lack perhaps the most important qualification for the position: a desire and enthusiasm for the job management offered rather than another mythical position with duties, titles, responsibilities, compensation or other perks that the candidate wishes he could obtain. In many cases, accommodation of one demand or foible leads to additional demands from the accommodated worker while either alienating or inviting other demands for special treatment for other workers on the team.

Ultimately, the workforce of a business is a team whose success depends on how well the players execute the game plan set by management. Regardless of how great the player’s credentials look on paper, his value to the company’s team depends upon how well his performance fulfills and furthers the performance of the team. The best candidates and employees are competent if not talented workers that have the skill and find fulfillment performing the duties contemplated by management under the leadership of its management for the pay and other offered perks as an opportunity too good to miss. A business that hires and retains workers that readily and enthusiastically perform in accordance with the business strategy and performance expectations established by management generally require less management.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help reviewing your group health plan or responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick│Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see http://www.cynthiastamer.com or the Stamer│Chadwick │Soefje PLLC website or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, 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, Inc.™ resources at http://www.solutionslawpress.com such as:

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Posted by Cynthia Marcotte Stamer

Id & Manage Hidden Employee Benefit Exposures In Business Insolvency Or Other Transactions

June 5, 2013

The June 4, 2013 announcement of the Employee Benefit Security Administration (EBSA) provides a timely reminder to businesses sponsoring employee benefit plans, their owners and management, plan fiduciaries, banks, administrative service providers and other plan vendors, employee benefit plan and bankruptcy trustees, corporate receivers, creditors, and others looking to expedite the windup of abandoned 401(k), profit-sharing and other individual account pension plans of the challenges that can result when employee benefit plan responsibilities are mishandled when companies fail or experience other significant events, as well as the availability of tools to help mitigate or prevent these challenges through responsible proactive action.

Hidden Employee Benefit Exposures For Unwary Abound For Parties In Business Insolvency Or Other Transactions

A complex maze of ERISA, tax and other rules make, administration and termination of employee benefit plans a complicated matter. When the company sponsoring a plan experiences a significant workforce or other restructuring, becomes distressed, goes bankrupt or liquidates, merges, sells assets or engages in other significant business transaction impacting the plans or its workforce, the rules, as well as the circumstances, can create a liability and operational quagmire for everyone from the sponsoring business, its management, buyers, vendors, plan fiduciaries, plan participants and beneficiaries, related entities, asset purchasers and others. While tough economic times may tempt business leaders to cut corners, more than 3o years of litigation and enforcement precedent make clear that cutting corners on the assessment and handling of employee benefit and other workforce responsibilities amid business distress or in other business transactions or events presents risks for all parties involved. See e.g., Tough Times Are No Excuse For ERISA Shortcuts; Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business Leaders. While many business leaders and plan fiduciaries lack a strong understanding of these rules and their implications in times of business or benefit plan distress or other significant business transactions, even those experienced with these concerns need to use caution to understand and respond to the series of ongoing changes in these rules, regulations and precedent that impact on the handling of plan related responsibilities in these and other special situations.

The Internal Revenue Code (Code) requires contains a maze of requirements that companies sponsoring pension, profit-sharing, health and other employee benefit plans, their plans, and plan administrators must follow when maintaining, administering, or terminating these plans including in many instances, special rules on the termination of the plans, distribution of assets, and the liabilities that attach to affiliated companies, successors, and assets resulting from transactions involving employee benefit plans or their sponsors.

In addition to the Code’s rules, companies and other individuals that in name or in function have or exercise discretionary responsibility or authority over the maintenance, administration or funding of employee benefit plans regulated by ERISA also generally must meet ERISA’s high standards for carrying out these duties based on their functional ability to exercise discretion over these matters, whether or not they have been named as fiduciaries formally. Under many circumstances these rules, or the handling of transactions can broaden the scope of responsibility or create exposures for a surprising range of parties dealing with the plan sponsor, related corporations or their stock, assets, benefit plans or workforce in corporate bankruptcies, mergers, asset or stock acquisitions, liquidations or other transactions.

Beyond these basic tax and fiduciary obligations, ERISA and the Internal Revenue Code (Code) create additional responsibilities and liabilities for when dealing with defined benefit or other pension plans subject to ERISA’s minimum funding and plan termination rules that when violated trigger a plethora of funding and notification obligations, penalties, liens on assets, and other obligations that can create significant traps for unwary plan fiduciaries and administrators, the sponsoring corporation, its management, affiliates and successors, as well as creditors or purchasers of stock or assets and others dealing with them.

Despite these well-documented responsibilities and a well-established pattern of enforcement by the Department of Labor, Pension Benefit Guarantee Corporation, Internal Revenue Service and private plaintiffs, many businesses and business leaders fail to appropriately understand these and other basic responsibilities and liabilities associated with the establishment, administration, termination and windup of employee benefit plans and other details about how their or others mishandling of employee benefit plan related responsibilities can undermine business goals and create unanticipated liability exposures.

Frequently, companies sponsoring their employee benefit plans and their executives mistakenly assume that they can rely upon vendors and advisors to ensure that their programs are appropriately established. The establishment and maintenance of these arrangements with limited review or oversight by the sponsoring company or its management team can be risky.

In other instances, businesses and their leaders do not realize that ERISA’s functional definition to determine fiduciary status means that individuals participating in discretionary decisions about the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans.

In yet other instances, purchasers, related entities, bankruptcy trustees and creditors or others don’t appreciate the way their own or others mishandling of employee benefit plan obligations or exposures can impact their transactions and associated risks.

Proactive Action Can Mitigate Exposures & Costs

For this reason, companies providing employee benefits and their management, service providers, and related entities and the businesses dealing with them need a clear understanding of the rules and responsibilities Federal law imposes on the funding, administration and termination of these programs, how these rules can impact their responsibilities and goals, and the steps necessary to avoid or mitigate exposures likely to result if they or others mishandle employee benefit plan related responsibilities or assets and how to avoid or mitigate these concerns.

The challenges of winding up an abandoned plan discussed in the EBSA news release yesterday highlights just one of these complications, the problem of dealing with abandoned plans.

When companies and their management abandon plans, they leave their plans, participants and beneficiaries, service providers and others in limbo, without the authority or funds to wind up the plans. When employers abandon their individual account pension plans, custodians such as banks, insurers and mutual fund companies are left holding the assets of these abandoned plans but without the authority to terminate such plans and make benefit distributions even in response to participant demands. Service providers often find themselves in the legally awkward situation of having continuing plan responsibilities without necessary direction or compensation for performance. Meanwhile, participants and beneficiaries can’t manage, access or often even get information about their funds until the situation resolves. Dealing with these issues usually requires cumbersome, time-consuming and costly processes often requiring complex, lengthy, highly formalistic and expensive judicial and administrative procedures to resolve while fiduciary, tax and other liabilities mount. Meanwhile, participants and beneficiaries often lose access to their accounts or benefits or even see plan value decline as plan assets that could go to benefits are diverted to cover administrative costs of winding up the plan.

The EBSAs abandoned plan program is just one of many examples of tools that parties struggling with these issues can use to mitigate these challenges and exposures. EBSA uses its abandoned plan program to facilitate a voluntary efficient process for winding up the affairs of abandoned individual account plans so that benefit distributions are made to participants and beneficiaries when this occurs.

The EBSA Abandoned Plan News Release and the EBSA’s related response Response to ADP/JP Morgan published June 4, 2013 show an example of how EBSA used its abandoned plan program to give critical relief to JP Morgan Chase Bank NA and ADP Inc. to use to wind up certain abandoned plans without exhausting the 90-day waiting period that ordinarily applies before the termination of a retirement plan based on the best interest of participants pursuant to 29 CFR §2578.1. By exercising its discretion to waive the 90-day notice period, the EBSA allowed JP Morgan Chase Bank NA and ADP Inc. to terminate immediately and wind up approximately 180 defined contribution pension plans abandoned due to corporate crises or neglect.

Requesting relief from the EBSA like that granted to JP Morgan Chase Bank NA and ADP Inc. in the announcement made yesterday is just one of various types of relief that legal counsel experienced with dealing with workforce and employee benefit plan challenges that can arise when companies or their plans become inadequately funded, bankrupt, or experience other significant transactions or events, can use to help debtors, and other plan sponsors, their management, affiliates, successors, buyers, plan fiduciaries, vendors, bankruptcy creditors and trustees.

Experienced counsel can help companies understand and negotiate the complex rules of the EBSA, the Pension Benefit Guarantee Corporation and the Internal Revenue Service governing dealings with these plans and where appropriate and available by taking advantage of relief or other options to mitigate these challenges. Involving experienced counsel to explore and use these options early can help all parties get participants and beneficiaries their benefits while minimizing legal risks, time and expenses associated with the wind up of these troubled or abandoned plans. Even where special dispensation is not available, the early involvement of experienced legal counsel as early as possible after the possibility that a business or its plans or assets will be impacted by underfunding, insolvency, a bankruptcy or liquidation, workforce reduction, sale, merger or other significant event can help plan and administer the steps necessary to handle cost effectively employee benefit related responsibilities and impacts.

For Help or More Information

If you need help with assessing or handing employee benefit or workforce challenges arising from business or employee benefit plan insolvency, stock or asset sales, mergers, bankruptcy or liquidation, reductions or other workforce changes or other significant business transactions or events, or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte 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 25 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 including extensive experience handling workforce and employee benefit challenges arising from plan underfunding, company restructurings, workforce change, insolvencies, bankruptcies, mergers, stock or asset acquisitions, or other significant business or plan transactions.

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, and insurers, bankruptcy trustees and receivers, asset purchasers, creditors and others dealing with plans and their sponsors, 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. Her experience includes involvement in the planning, execution and resolution of workforce and employee benefit related details of a multitude of high and low profile restructurings, bankruptcies and other significant transactions throughout her more than 25 year career.

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 from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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Posted by Cynthia Marcotte Stamer

Administration Proposes To Let PBGC Board Set Premiums In Effort To Shore Up Finances

April 10, 2013

The Obama Administration again is proposing that the Board of the Pension Benefit Guaranty Corporation (PBGC) get the power to set premium rates based on the financial soundness of company sponsors to shore up the agency’s finances in hopes of heading off the need for a government bailout of the agency’s liabilities.

PBGC, which insures traditional pensions offered by non-governmental employers continues to struggle for funding to meet the costs of funding its program of insuring failed private defined benefit pension plans. Always challenging, maintaining financial solvency has become particularly problematic with company failures soaring and investment returns down in the ailing economy. On November 16, 2012, the agency said its deficit increased to $34 billion, the largest in PBGC’s 38-year history.

The PBGC currently relies exclusively on premiums set by Congress and assets recovered from failed plans to operate and fund its private pension guarantee obligations. It presently doesn’t receive taxpayer dollars. Premiums, set by Congress, have historically been too low to meet the agency’s needs.

The Government Accountability Office issued a report saying Congress should consider “revising PBGC’s premium structure to better reflect the agency’s risk from individual plans and sponsors

The proposal to give the PBGC authority to determine premiums is intended to shore up the agency’s funding. “Without premium increases PBGC will be faced with requesting a taxpayer bailout or shutting down,” said PBGC Director Josh Gotbaum. “The current system punishes responsible companies by making them pay for the mistakes of others and punishes plans by raising rates just when companies can least afford it. Tha’s why administrations of both parties, and recently GAO, have supported giving PBGC what the FDIC has long had — the ability to set its own rates and to set them in ways that are fair.”

The Administration originally introduced the idea of allowing the PBGC to set its own premiums in 2012. It now has reintroduced the effort that ties premiums to company risk in its 2014 budget. Under the current proposal, the PBGC Board, which consists of secretaries of Labor, Commerce, and Treasury, with the secretary of Labor as chair, wouldn’t get the authority to set rates until 2015. The budget requires the board to perform a one-year study with a public comment period. Additionally, premium increases would be gradually phased in to give company sponsors time to prepare for the new rates.

For Help With These Or Other Matters

If you need help dealing with pension or other employee benefit funding, design or administration challenges, dealing with the PBGC, IRS, Labor Department or other agency or legal challenge to your organization’s existing employee benefit or other practices, or other workforce re-engineering, labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer.

Ms. Stamer has more than 26 years experience advising and representing employer, employee benefit and other clients on human resources, employee benefit, internal controls and risk management matters including extensive work on workforce re-engineering and other human resources and employee benefits challenges of distressed and other companies, and related matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience worker classification and other employment, employee benefits and workforce matters, Ms. Stamer works extensively with employers, employee benefit plan sponsors, insurers, administrators, and fiduciaries, payroll and staffing companies, technology and other service providers and others to develop and operate legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals. Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations.

A Fellow in the American College of Employee Benefits Council, the immediate past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, the Vice Chair of the ABA TIPS Employee Benefits Committee, the Gulf States Area TEGE Council Exempt Organizations Coordinator, past-Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training 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, and many other national and local publications.

You can learn more about Ms. Stamer and her experience, find out about upcoming training or other events, review some of her past training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer at www.CynthiaStamer.com.

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, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com.

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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Posted by Cynthia Marcotte Stamer

Extension of Unemployment Benefits Signed Into Law & Immediately Effective As Filibuster Ends

March 3, 2010

By Cynthia Marcotte Stamer

Effective yesterday, the Temporary Extension Act of 2010, H.R. 4691,extended unemployment benefits to April 5, 2010. It also extended and expanded the COBRA premium subsidy requirements originally established under the American Recovery and Reinvestment Act (ARRA) and plan sponsor penalties for noncompliance.

In recent days, H.R. 4691 drew great media attention when its enactment was delayed by a filibuster by Kentucky Senator Jim Bunning. As media coverage of the Bunning filibuster focused almost exclusively on its unemployment benefit extension provisions, many U.S. employers and others are unaware of its provisions extending and expanding the COBRA premium subsidy mandates and authorizing higher pay for Medicare doctors and funding for federal highway programs. President Obama signed H.R. 4691 into law on March 2, 2010 just hours after Senator Bunning ended his highly publicized filibuster.

Unemployment Benefit Extensions

H.R. 4691’s unemployment insurance benefit provisions became immediately effective when signed by the President. These provisions:

Extend the period during which individuals may file applications for Federal Emergency Unemployment Compensation (EUC) from the current end date of February 28, 2010 to April 5, 2010 and extend the period during which individuals may claim and be paid EUC from July 31, 2010 to September 4, 2010.
Extend from the current end date of February 28, 2010 to April 5, 2010 the period during which individuals may qualify for the Federal Additional Compensation (FAC), the extra $25 weekly benefit amount on state and federal unemployment compensation, while also providing for weekly payment during the phase out period for weeks ending October 5, 2010 instead of August 31, 2010.
Extend the period during which 100% federal reimbursement for weeks of regular federal extended benefit payments to April 5, 2010, with the state option to continue the extended period from July 31, 2010 to September 4, 2010.

COBRA Premium Subsidy Extended & New Penalties Added

In addition to extending unemployment benefits, H.R. 4691 also extends and expands the availability of the temporary COBRA subsidy rules originally added to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) medical coverage continuation requirements by the American Recovery and Reinvestment Act of 2009 (“AARA”) last February. For details about these COBRA premium subsidy amendments, see here. To minimize their COBRA rights under the amended COBRA premium subsidy rules, group health plans, their employer or union sponsors, administrators, insurers and service providers will need to act quickly to prepare and provider required updated notifications to assistance eligible individuals of these extended eligibility periods and their resulting rights, and otherwise update their plan documents, procedures, and COBRA notifications in light of these new rules.

For Added Information or Assistance

If your organization need advice or assistance with these or other labor and employment, employee benefits, compensation or related matters, consider contacting Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer.

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Ms. Stamer has extensive experience advising and representing management about labor and employment, employee benefits, compensation and other related management matters. A nationally recognized author and lecturer, Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. 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 here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here. Examples of other recent updates that may be of interest include:

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Comments Off on Extension of Unemployment Benefits Signed Into Law & Immediately Effective As Filibuster Ends | ARRA, Bankruptcy, COBRA Subsidy, Corporate Compliance, Employee Benefits, Employers, Human Resources, Insurance, Internal Controls, Stimulus Bill, Unemployment Insurance | Tagged: ARRA, COBRA, Corporate Compliance, Employer, reductions in force, Reengineering, Temporary Extension Act of 2010, unemployment | Permalink
Posted by Cynthia Marcotte Stamer