Legislative & Regulatory Updates

Nondiscrimination Testing for Cafeteria Plans and Health and Welfare Benefit Plans

The Internal Revenue Code ("IRC") and related Regulations require that a "cafeteria" or 125 plan and certain health and welfare benefit plans undergo annual nondiscrimination testing to ensure that, in general, they do not discriminate in favor of highly compensated employees, highly compensated individuals and/or key employees (as these terms are defined in the IRC).

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Golden Parachute Compensation Arrangements

The Securities and Exchange Commission (SEC) recently issued its final rule implementing the requirements under the Dodd-Frank Act relating to approval of executive compensation and "golden parachute" compensation arrangements by shareholders. This rule applies to all issuers (public companies) who are subject to the executive compensation disclosure requirements under Item 402 of Regulation S-K (i.e., CD&A and compensation tables and other narrative disclosures).

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Department of Labor Finalizes Safe Harbor Ruling for Small Plans

Effective January 14, 2010, the Department of Labor (DOL) has established a safe harbor rule requiring a timely deposit of seven business days for employee contributions. The safe harbor rule applies to retirement and health and welfare plans subject to ERISA with fewer than 100 participants, often referred to as “small plans.”

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