Regulatory safe harbors play a critical role in the design of employee benefit plans by:

  • Providing concrete guidance on how to comply with the complex rules that govern plans;
  • Facilitating efficient, effective and consistent plan administration; and
  • Encouraging employers to establish and continue their employee benefit plans and furthering participants’ understanding of the rules.

Without this guidance, employers, fiduciaries, and service providers would find themselves more regularly exposed to the potentially staggering costs of responding to alleged rule violations, participants would have a harder time understanding how their plans operate, and it would be more difficult for regulators to assess the legality of plan documents.

John Vine, Senior Counsel at Covington & Burling, LLP, has recently published an article entitled “Safe Harbors for Employee Benefit Plans” in BNA’s Tax Management Compensation Planning Journal.  The article examines regulatory safe harbors and explains how they differ from other forms of administrative guidance.  The article also explains how well-designed regulatory safe harbors support important policy goals and offers suggestions for improving regulatory safe harbors in the future.

Given the importance of regulatory safe harbors to the employee benefit plan system, employers, fiduciaries and even plan participants will find this article to be interesting and informative.

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Photo of Julie Edmond Julie Edmond

Julie Edmond has extensive experience counseling and litigating in the employee benefits area, including traditional defined benefit, cash balance, 401(k), profit-sharing and money purchase pension plans; executive compensation and § 409A; § 403(b) plans, § 457 plans and other plans for tax-exempt organizations…

Julie Edmond has extensive experience counseling and litigating in the employee benefits area, including traditional defined benefit, cash balance, 401(k), profit-sharing and money purchase pension plans; executive compensation and § 409A; § 403(b) plans, § 457 plans and other plans for tax-exempt organizations; ESOPs; cafeteria plans; VEBAs and self-insured medical plans and other welfare plans.  Her experience includes plan selection, formulation and drafting, regulatory compliance, audits, voluntary compliance, prohibited transactions and fiduciary duty requirements, separate line of business issues, use and handling of employee benefits and benefit plans in corporate transactions, and ERISA litigation.

Photo of Michael J. Francese Michael J. Francese

As a partner in Covington’s employee benefits practice group, Mike Francese focuses on counseling clients in matters arising under their employee benefit plans and executive compensation arrangements with respect to ERISA, the Internal Revenue Code, and related federal and state laws. He also…

As a partner in Covington’s employee benefits practice group, Mike Francese focuses on counseling clients in matters arising under their employee benefit plans and executive compensation arrangements with respect to ERISA, the Internal Revenue Code, and related federal and state laws. He also represents clients before agencies and courts on both the federal and state level, and consults with them in connection with mergers, acquisitions, and other corporate transactions.

Mike’s practice covers a broad spectrum of employee benefit plans and programs, as well as a variety of executive compensation arrangements, such as:

  • tax-qualified defined benefit and defined contribution plans, including traditional and hybrid pension plans, 401(k) plans, profit-sharing plans, and ESOPs;
  • non-qualified deferred compensation arrangements, including top-hat plans, 457(f) arrangements for employees of non-profit employers, and other types of nonqualified deferred compensation arrangements;
  • equity-based compensation arrangements, including stock options, restricted stock, and phantom equity awards;
  • health and welfare plans, including cafeteria, medical, disability, and severance plans and arrangements; and
  • executive employment and consulting agreements, including change in control, and parachute payment arrangements.