The Compensation and Employee Benefits practice at Leonard, Street and Deinard works with clients to design, implement and maintain employee benefit programs. As part of an employer’s compensation strategy, these programs can help align employee interests with the goals of the owners, maximize tax deferrals and tax savings associated with desired benefits, and provide a competitive edge in attracting and maintaining excellent employees. Certain benefits planning strategies can also be used to structure efficient business succession and wealth transfer. The group’s member attorneys have in excess of 50 years of combined experience working with employers, administrators and the government agencies that regulate these plans and programs.

Representative Experience

We have broad experience in all aspects of compensation and employee benefits, including:

• Qualified retirement plans, including pension, profit sharing and 401(k) plans
• 403(b) and 457 retirement and deferred compensation plans for tax-exempt and government organizations
• Welfare plans, including medical, dental, life insurance and disability plans
• Cafeteria/flexible benefit plans, including medical expense and dependent care expense reimbursement plans, health reimbursement arrangements (HRAs) and health savings accounts (HSAs)
• Top hat supplemental benefit plans (deferred compensation plans for select management employees)
• HIPAA, COBRA, FMLA compliance
• ERISA compliance audits (preemptive, voluntary audits of benefit plans)
• IRS and Department of Labor audits
• Employee Stock Ownership Plans (ESOPs)
• Employee Stock Purchase Plans (ESPPs)
• Equity based incentive plans, including option plans, restricted stock plans, stock appreciation rights plans and phantom stock plans
• Fiduciary advice and policy development, including providing guidance to compensation committees and boards of directors
• Multiemployer pension and welfare fund trustee representation
• Multiemployer pension plan withdrawal liability issues for employers
• Pension funding waivers
• Plan terminations and mergers
• Benefits aspects of corporate acquisitions and mergers
• Benefits administration (including TPA support)
• ERISA claims defense and prosecution

Selected Legal Matters

Our attorneys have provided counsel in the following areas:

Transferring ownership to employees

We have provided counsel and transactional assistance to numerous companies—including retail, manufacturing, food processing, engineering, computer software and architectural firms—in transferring ownership to employees through the use of employee stock ownership plans (ESOPs).

Profit sharing plans

We have designed age-weighted and class-based profit sharing plans for engineering and manufacturing representatives, as well as for accounting, law and advertising firms, and other companies. In contrast to traditional profit sharing/pension plans, these types of plans permit companies to allocate a disproportionate share of company contributions to business owners and highly compensated employees covered by the plan.

Fiduciary duties and prohibited transactions

We have worked with our clients to establish benefit committees and to develop charters for them. We have counseled clients regarding all aspects of fiduciary duties and liability, including prohibited transactions involving plan sponsors and service providers for benefit plans.

Health care benefits

Like most employers, our clients have faced rising health care costs and have turned to us for assistance in restructuring certain aspects of their health plans, including altering spousal and dependent eligibility for benefits, and implementation of health reimbursement arrangements. We have also assisted clients with HIPAA compliance, including the development of privacy notices, internal procedures and policies.

ERISA audits

We have conducted preventive ERISA compliance audits for companies in many industries, including construction, publicly traded telecommunications, and nonprofit. These audits (protected by attorney-client privilege) assist employers by exposing and correcting operational and document-related weaknesses and noncompliance in employee benefit plans, before any government audits or participant claims have been made.

IRS Closing Agreement

We negotiated the continued qualification of its defined benefit plan with the Internal Revenue Service for a Minnesota-based nonprofit organization. The organization had inadvertently failed to include a number of employees as participants for many years. The negotiated sanction amount was modest in comparison to the maximum amount that could have been charged.

Corporate Transaction

We assisted a group of medical clinics with the benefits issues involved in acquiring additional clinic sites. Such work included reviewing the retirement plan documents of both the existing multiclinic group members and the new clinics, and in merging other benefits, including different vacation and sick policies.

Nonqualified Deferred Compensation Arrangement

We provided a closely held business with a nonqualified deferred compensation arrangement. The arrangement permitted an executive nonfamily member to defer salary until termination of employment. The plan design gave the executive more flexibility than found under some deferred compensation arrangements.

Stock Appreciation Rights Plan

For a large closely held corporation we designed and implemented a stock appreciation rights (SAR) plan to replace a plan under which executives were required to purchase stock if they wished to participate in the increase in value of the business. The stock appreciation rights plan permitted the company to grant appreciation rights units; it also provided for covered employees to "purchase" appreciation rights units using their year-end bonuses. When the company was later sold, we assisted the company in terminating the SAR plan and paying the employees the substantial benefits that had accrued under the plan.