Employee Benefit Planning
If you are a business owner, there are various moving parts you have to keep on top of. In order to bring additional value to your company, and attract the top talent available. While offering benefits to your employees may seem straightforward, once you sit down and start the process, you may find the process to be more intricate than you thought. When it comes to employee benefit planning McCarthy Weidler can provide you with professional advice and guidance.
What is Employee Benefit Planning?
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act (or ERISA for short) is a federal law that outlines the minimum standards for voluntarily established pension and health benefit plans provided by private industries. ERISA’s were established to protect plan participants and their beneficiaries.
ERISA’s have extensive rules attached as set out by the IRS and Federal Tax Law. As an employer, if you are setting up a pension plan for your employees, there are certain guidelines you have to follow. Your responsibilities do not end when the plan is set up, and there are certain income requirements (from the employer) that must be met.
McCarthy Weidler will walk you through the requirements to ensure you are always in compliance with the law. We can also prepare the documentation that goes along with setting up your plan, as well as supervise the administration of the plan once it is established. Plan documentation needs to be very thorough, and the government has put legislation in place to protect employees. We will make sure your plan is in full compliance with the law, and make sure that all documentation is clear so that employees understand what they are being offered. As employees come and go, there will be a need to add or remove employees from your plan. If you are removing an employee, their funds will need to be directed elsewhere. We can supervise your administration team and provide them with quality advice.
Employee Stock Plans
If you are an executive at a publicly traded corporation, you may be in talks with your board about creating employee stock plans. These are a popular benefit offered by many publicly traded companies. Understandably, these plans involve a lot of documentation and you will need legal help to set them up. The McCarthy Weidler team can provide expert assistance when it comes to your employee stock plans. We can:
- Set up stock ownership plans
- Set up stock option plans
- Prepare documentation for these plans
- Supervise the administration of these plans
We can meet with you and the board to discuss the difference between stock ownership plans and stock option plans. You may also want to offer different options to different employe levels (stock options for management and executives, stock ownership plans for lower level employees). If you will be offering matching contribution funds, we can discuss how you may want to set that up (perhaps matched funds cannot be withdrawn for one year after vesting). There are a lot of options available, and no two situations are exactly alike. We can provide you the advice and guidance you need to ensure your stock plans are set up correctly, and to ensure that you are following all the reporting requirements.
Many employees expect employer assistance when it comes to planning for their future retirement. There are a number of things you, as an employer, can provide to help your employees create a plan for retirement. One thing you can offer is a pension plan of some sort. It will be up to you to decide if you would like to offer employees a defined benefit pension plan, or a defined contribution pension plan. There are pros and cons to each, and our professionals will walk you through both options, and help you decide what you would like to offer.
We can also provide qualified plan supervision once the plan has been set up. In addition to this, you may be thinking of providing your employees with extended health and welfare benefits (that would continue into their retirement years). We can advise you on this as well, and provide you with information on other potential benefits you could offer, such as income tax planning.
IRS Correction Program Filings
If you have already set up programs for your employees, you may one day receive a letter from the IRS stating that something was done incorrectly. This can be very shocking and stressful. McCarthy Weidler can help, as our experts are up to date on all of the correction programs the IRS offers. These programs were established as a way for employers to correct any errors that may have occurred in the past. There are currently 3 programs offered to correct plan errors:
- Self-Correction Program
- Voluntary Correction Program
- Audit Closing Agreement Program
Depending on your unique situation, we will choose the best plan of action to correct any errors, as well as go through your plan(s) to ensure future compliance. It is not enough to simply fix the error, once you are made aware of an error in one part of your plan, it is a good idea to have us review all of your plans to ensure that defective plans are brought into compliance with federal legislation.
It is a great perk to be able to offer employees health benefits, retirement benefits and stock options. These are the types of incentives that will attract high quality employees, and may assist with lowering employee turnover as well as increasing employee morale. As the employer, you do have many responsibilities when it comes to setting up and administering these plans. There are also tax implications for you and your business. It is best to have a legal professional set up and review this plans, to ensure that you are in compliance with all regulations. The McCarthy Weidler team is here to provide the assistance you need.