Photo of Robert Newman

Robert Newman represents clients ranging from small employers to some of the nation’s largest employers, including for-profit and tax-exempt entities.  His practice includes designing, drafting, and amending a wide range of retirement plans (including 401(k) plans, ESOPs, and traditional and hybrid defined benefit plans) and welfare plans (including health, severance, and cafeteria plans); creating executive compensation arrangements including nonqualified deferred compensation plans, stock option plans, and other incentive plans; representing clients before the IRS and the Department of Labor; assisting clients with legislative initiatives; providing benefits expertise in corporate transactions and ERISA litigation; counseling clients with respect to pension fund investments in private equity funds and hedge funds; and negotiating and writing employment agreements.

Seems like we’ve written this before, but this time we (actually a federal district court) really means it:  the court in Lee v. Verizon granted last Friday Verizon’s motion to dismiss a class action lawsuit challenging its transfer in late 2012 of $7.5 billion of pension liabilities to Prudential (Lee v. Verizon, N.D.

When the Supreme Court held in United States v. Windsor last June that federal law recognizes same-sex marriages, the question arose whether this ruling would apply to tax-qualified retirement plans retroactively.  Last week, the IRS answered that question, in part. For tax-qualification purposes, plans must generally recognize the Windsor decision as of the date of the decision (June 26, 2013).  Plans could also voluntarily recognize the effect of the decision as of an earlier date.  The IRS, however, left open several questions, including how Windsor would apply with respect to a claim by a participant or beneficiary for retroactive benefits.  Below are highlights of the recent IRS guidance (consisting of Notice 2014-19 and FAQs).
Continue Reading Will Windsor Apply Retroactively to Retirement Plans? IRS Provides Some (But Not All) the Answers

Earlier today, the Supreme Court issued its opinion in United States v. Quality Stores.  The opinion, authored by Justice Kennedy, reverses the Sixth Circuit and concludes that the supplemental unemployment benefit payments (or “SUB” payments) at issue in the case are subject to tax under the Federal Insurance Contribution Act (“FICA”).  The Government has

The final shared responsibility regulations under the Affordable Care Act, issued earlier this month, in large part maintain the rules set forth in the proposed regulations.  However, there are several ways in which the final regulations modify or clarify these rules.  Below is a top ten list (which we’re sure David Letterman would use if he were a benefits lawyer) of things to know about the final regulations.

The rules govern the requirement that employers with at least 50 full-time employees could owe a “shared responsibility” excise tax if they fail to offer group health coverage.  One penalty (known as the “A” penalty) applies if an employer fails to offer group health coverage to 95% of its employees on every day of a month and at least one employee purchases coverage through an exchange with a federal subsidy; the “A” penalty each month is an excise tax of 1/12 of $2,000 for each full-time employee in excess of 30.  Even if the employer meets the 95% test, a separate penalty (known as the “B” penalty) applies if the employer fails to offer affordable health coverage to an employee, and the employee purchases coverage through an exchange with a federal subsidy; the “B” penalty each month is an excise tax of 1/12 of $3,000 per each such employee who actually purchases coverage through an exchange with a federal subsidy.  A “full-time employee” is a common-law employee who works an average of at least 30 hours per week. (You will find a more detailed description of the shared responsibility rules here and here.)

Below are our top 10 highlights of the final regulations:
Continue Reading Top Ten Things to Know about the Final Shared Responsibility Regulations

Employers should be aware that the Department of Human Services (“HHS”) is stepping up its enforcement of requirements for covered entities, such as group health plans, to adopt and implement policies and procedures for protecting and securing protected health information in accordance with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).  As our

SPX Corporation recently announced it would transfer pension liabilities for 16,000 retirees to Massachusetts Mutual.  The amount of these liabilities is reported to be $625 million.  In addition, SPX will offer 7,500 former employees the option of taking a lump sum distribution from the SPX pension plan.  SPX expects that the two actions together will

Who is most influential in shaping the future of the nation’s pensions?  Institutional Investor names the top 40 for 2013.  The list includes politicians (such as Rahm Emanuel and two U.S. senators), actuaries, hedge fund managers, government officials, academics − and two lawyers in private practice, David Boies (for his work defending Rhode Island’s

The Department of Labor’s Office of Inspector General recently issued a report detailing concerns with the valuation of alternative investments (such as private equity funds, hedge funds, and real estate) held by ERISA plans.  ERISA requires plan sponsors and fiduciaries to value investments for several purposes, including to determine funding obligations, select investments, monitor investment performance, and file accurate financial statements.  The report notes that many plan fiduciaries rely on valuations provided by managers of alternative investments without analyzing the basis for the valuation or seeking independent review.  The report suggests that this practice poses substantial risks to the retirement system and urges the Labor Department to require more rigorous valuation methodology.
Continue Reading ERISA Plans’ Valuation of Private Equity and Other Alternative Investments Draws Increased Scrutiny

Earlier today, the Supreme Court agreed to review the Sixth Circuit’s decision United States v. Quality Stores.  In that decision, the Sixth Circuit sided with taxpayers and concluded that certain severance payments that qualify as supplemental unemployment benefit payments (or “SUB” payments) for federal income tax purposes are not subject to tax under the

The IRS issued a notice today setting forth special procedures by which employers may claim a refund of FICA taxes that were paid on employee benefits solely because of the application of the Defense of Marriage Act (“DOMA”).  Section 3 of DOMA prohibited the IRS from recognizing same-sex marriages for federal tax purposes and was struck down by the Supreme Court last June in a case called United States v. Windsor.  Prior to the Windsor decision, employers paid the employer’s share of FICA tax, withheld the employee’s share of FICA tax, and withheld income tax with respect to benefits for same-sex spouses of employees when the benefits could be provided tax-free to employees’ opposite-sex spouses.  In large part, the benefits at issue are health benefits, although certain tuition and other benefits also might have been taxed solely on account of DOMA.  Following the Windsor decision, refunds now may be obtained.
Continue Reading IRS Issues Special Administrative Procedures for DOMA Tax Refund Claims by Employers