08 Oct 2024
So Long, Farewell: Designing Exit Packages When It’s Time to Say Goodbye
Plan sponsors have many decisions to make in designing exit programs and should be aware of the consequences of their choices. Considerations include whether to offer a voluntary or involuntary plan, whether to seek coverage under ERISA for such a plan, and, if so, whether it should be a welfare plan or a pension plan. A group layoff can occur all at the same time or it can be staggered, as long as all the terminations are part of the same decision-making process. Either way, the requirements apply to all such terminations. And then, don’t forget that, with executives particularly, there may be Section 409A considerations.
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- Employee Benefits & Executive Compensation Key Legal Developments Tracker (Current)
Stay informed on new developments.- ERISA. DOL’s EBSA division clarifies and updates its cybersecurity guidance indicating that the guidance applies to all types of ERISA plans, including health and welfare plans. EBSA, Compliance Assistance Release No. 2024-01.
- Retirement Plans. IRS issues guidance in the form of questions and answers for section 110 of the SECURE 2.0 Act of 2022, which allows employers to match employees' qualified student loan payments under section 401(k) plans, section 403(b) plans, SIMPLE IRA plans, and governmental section 457(b) plans. IRS Notice 2024-63.
- Health and Welfare Plans. IRS issues a fact sheet in the form of updated FAQs regarding the ACA premium tax credit. IRS News (Sept. 30, 2024).
- Employment Agreements and Restrictive Covenants. FTC appealed a Middle District of Florida’s August 15 decision that granted a stay of the FTC’s noncompete rule enjoining the FTC’s enforcement of the rule against the plaintiff in that case. So far, the FTC has not appealed the Fifth Circuit’s nationwide ban on the rule issued in Ryan v. FTC. Properties of the Villages, Inc. v. FTC, 2024 U.S. Dist. LEXIS 151982 (M.D. Fla. Aug. 15, 2024).
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