Employee Benefits

Vedder Price's employee benefits practice serves clients ranging from large multi-national public companies to small professional service corporations.

The firm has one of the nation's most experienced and sophisticated benefits practices, with approximately 20 legal professionals concentrating in employee benefits and executive compensation. Its members regularly address the variety of the technical, legal and practical problems arising in connection with every conceivable type of employee benefit plan and form of executive compensation.

In the employee benefits area, Vedder Price has regular and primary responsibility for the legal work concerning the design, administration and legal compliance of pension, profit sharing and welfare benefit plans with aggregate assets of several billion dollars. In addition, the firm represents investment managers and advisors who manage substantial funds.

In its nationally known executive compensation practice, the firm's attorneys represent executives, companies and compensation committees in the negotiation and preparation of employment agreements, as well as the design and implementation of incentive, deferred compensation, supplemental retirement and severance plans and arrangements.

In all aspects of the firm's employee benefits practice, Vedder Price's attorneys balance the legal and the practical business considerations confronting employers. Employee benefit plans constitute a significant percentage of payroll dollars and are a critical component of an employer's overall human resource and compensation program. Therefore, it is essential to structure and administer these plans with an eye toward the financial and human resource implications as well as the legal requirements.

Qualified Plans

The firm's employee benefits attorneys devote a significant amount of their time to advising clients in designing, establishing and administering all types of qualified retirement plans, including defined benefit, cash balance, profit sharing, 401(k) and employee stock ownership plans. The firm's services include drafting the plan and trust documents to meet both clients' specific needs and the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"), the Internal Revenue Code and securities laws, providing guidance on matters such as the deductibility of contributions to and the taxation of distributions from retirement plans, advising on employee communication matters and analyzing and addressing retirement plan issues which arise in connection with mergers and acquisitions, corporate spin-offs or reductions in force, and fiduciary matters such as trust management and avoiding prohibited transactions.

Litigation

Since the passage of ERISA, the firm has represented clients across the country in connection with the extensive body of case law interpreting ERISA and related employee benefits issues. Vedder Price regularly advises clients on the procedures for handling claims and litigation strategies, anticipating trial considerations. Even more than in some other areas of law, benefits litigation is highly influenced by careful structuring of administrative claim proceedings. The firm has presented numerous seminars dealing with benefit claims and litigation around the country.

Vedder Price has won several leading cases in the employee benefits field, including two Supreme Court cases and dozens of important cases in the courts of appeals and federal district courts. These cases have involved plan amendments and terminations, alleged breaches of fiduciary duties, federal preemption of state laws, withdrawal liability claims and many other subjects. While the firm prides itself on its successful record in multimillion dollar, complex litigation, it also handles simpler benefit disputes efficiently and economically, frequently achieving either an early settlement or a victory on summary judgment.

Plan Administration

The firm is continually advising clients with regard to plan administration. Since ERISA was passed in 1974, Congress has enacted additional legislation affecting employee benefit plans several times, including the Uruguay Rounds Agreement (GATT), the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997 (collectively "GUST") and more recently the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Medicare Prescription Drug Improvement and Modernization Act of 2003. In addition, the Internal Revenue Service and Department of Labor regularly issue volume of regulations, rulings, opinions and procedures. These complex laws and comprehensive regulatory guidance have placed an increasing demand on plan administrators to meet all applicable compliance requirements.

In particular, Vedder Price advises clients with regard to the fiduciary duties involved in plan administration. While somewhat foreign to ordinary business practice, the courts have required strict adherence to fiduciary duties, thus demanding careful planning and implementation in the course of plan administration. While many 401(k) plans provide for participant self-directed investments, plan fiduciaries may still need to adhere to certain procedures to avoid responsibility for such investments. The firm has also presented national seminars dealing with the fiduciary responsibilities of plan sponsors.

Executive Compensation

Vedder Price's employee benefits attorneys also have extensive knowledge and experience advising clients with respect to the corporate, securities, fiduciary and tax law considerations in the negotiation, design and implementation of executive employment and severance agreements, stock-based and other incentive programs and deferred compensation and supplemental retirement plans. Our executive compensation practice has been featured in The Wall Street Journal, the New York Times and other national media. With the increasingly restrictive limits on "qualified" plans, "nonqualified" benefits have become an important part of an executive's total compensation package. Additionally, the firm has participated in the preparation of comments on regulations dealing with the implications of the securities laws on executive compensation and employee benefit programs.

Vedder Price attorneys are also active in corporate and securities transactions, assisting clients in the corporate, securities, employee benefits and compensation aspects of capital-raising, acquisition and divestiture transactions. These activities encompass reviewing legal issues that may come up in a transaction, negotiating related aspects of acquisition agreements, reviewing compliance issues relating to a target company's plans and advising clients on plan changes, mergers and terminations post-closing.

Welfare Plans

An important aspect of most employee benefit programs is the provision of welfare benefit coverage to employees, including insured and self-funded group health, cafeteria, life, disability, severance and other welfare plans as well as health reimbursement arrangements and health savings accounts. The firm advises clients with respect to maximizing tax deductions attributable to the costs of such coverage, complying with the nondiscrimination rules applicable to welfare plans, and assisting in all matters relating to establishing and maintaining such plans.

The last several years have seen a significant growth in the federal regulation of welfare plans. Although ERISA established certain reporting and fiduciary requirements, recent legislation has increasingly created substantive benefit obligations. The first example of this was COBRA, but the more recent HIPAA legislation has significantly increased the requirements for health plans, with limitations on pre-existing conditions, special enrollment periods and nondiscrimination standards. The latest development under HIPAA has been the issuance of very complex privacy regulations. Vedder Price has the capabilities to assist in all aspects of these requirements.

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