Prohibited Transactions Under ERISA: Obstructing Additional Taxes and Major Penalties
The “prohibited transactions” rule under the Employee Retirement Income Security Act (ERISA) was created to ban transactions highly vulnerable to abuse. Recently, the Department of Labor (DOL) has re-proposed rule which aims to expand the definition of fiduciary investment advice. It includes two new prohibited transaction class exemptions as well as amendments to existing class exemptions. The proposed rule preserves the ability of fiduciary advisers, dealers, and insurance agents to continue accepting common forms of compensation that would otherwise be prohibited as conflicts of interest.
The DOL’s goal is to make sure that the new and amended exemptions available at the same time as the regulatory proposal becomes effective.
In a two-hour LIVE Webcast, a seasoned panel of thought leaders and professionals assembled by The Knowledge Group will offer the audience with an in-depth discussion of the fundamentals as well as updates of ERISA’s prohibited transactions rule. The panel will also offer the audience an overview of the three categories of prohibited transactions as outlined in 29 U.S.C. § 406. Going beyond the basic mechanics, our panel will present their thoughts and opinions on how to best comply with the ERISA “prohibited transactions” rule.
Key topics include:
- Prohibited Transaction Rule - A Legal Primer
- Three Categories of Prohibited Transactions
- Transactions between Plan and party in interest;
- Transactions between Plan and fiduciary; and,
- Transfer of real or personal property to plan by party in interest.
- Prohibited Transaction Exemptions and Amendments
- Opportunities and Legal Challenges
- Up-to-the-minute Regulatory Developments
Holly Hejmowski, Senior Manager
Freed Maxick CPAs
- Who are related parties, parties-in-interest and disqualified person(s)?
- What exactly is a prohibited transaction?
- What types of exemptions are available for PTs?
- Class exemptions
- Individual exemptions
- Examples of PTs (common and complex)
- What are the reporting implications if a PT is discovered? (Both financial statement and filing requirements.)
Rachel J. Markun, Partner
Hawkins Parnell Thackston & Young LLP
- Summary of U.S. Department of Labor (“DOL”) Proposed Regulations Regarding “Fiduciary” and Related Exemptions
- DOL Investigations
- Potential Consequences of Prohibited Transaction Violations
- Selected Best Practices
Shane J. Stroud, Special Counsel
Cadwalader, Wickersham & Taft LLP
Voluntary Fiduciary Correction Program
- Purpose and Overview
- VFCP Criteria
- How to Apply
- Covered Transactions
- Acceptable Corrections
- Required Documentation
- Restitution to Plans
- Excise Tax Exemption (PTE 2002-51)
- Lost Earnings Example
Who Should Attend:
- ERISA Lawyers
- Employee Benefits Lawyers
- Fiduciary Advisers
- Employee Benefits Personnel
- Top Level Management
- Insurance Agents
- Investment Advisers
- Other related/interested Professionals and Organizations
Holly M. Hejmowski, CPA is a Senior Manager with over eleven years of professional accounting experience working at Freed Maxick CPAs, P.C., which is a top 100 accounting firm. Holly specializes in employee benefit plan audits including defined contribution, defined benefit, 403(b), and Taft-Hartley multi-employer plans for both private and public companies. She is responsible for the overall planning, organization, supervision, and completion of numerous employee benefit plan audits. She has provided litigation support to employee benefit plans and has assisted clients undergoing Department of Labor and Internal Revenue Service audits.
Holly M. Hejmowski, CPA is a Senior Manager with over eleven years of professional accounting experience working at Freed Maxick …
Rachel J. Markun is a Partner in the Napa office of Hawkins Parnell Thackston & Young LLP. Rachel advises clients regarding the corporate, tax and fiduciary issues relating to ESOPs. She has represented ERISA plan fiduciaries, employers and institutions in connection with legislative and regulatory initiatives relating to the Internal Revenue Code of 1986, as amended, ERISA, the federal securities laws, and the California laws. She has extensive tax expertise relating to tax-exempt entities and all aspects of retirement plan qualification matters as well as fiduciary and corporate governance matters. She represents retirement plan corporate sponsors in a variety of matters, including Internal Revenue Service audits and U.S. Department of Labor investigations. She counsels many ESOP companies and fiduciaries on a range of compliance, best practices and risk management issues, and with respect to various transaction matters.
Rachel J. Markun is a Partner in the Napa office of Hawkins Parnell Thackston & Young LLP. Rachel advises clients …
Shane Stroud’s practice focuses on a wide variety of matters in the areas of employee benefits and executive compensation, including those related to mergers, acquisitions, spin-offs, initial public offerings and other extraordinary corporate events (such as private equity and leveraged buyout transactions). Shane also routinely advises clients on excessive compensation, golden parachute and deferred compensation issues.
Shane also counsels clients with respect to bankruptcy, securities, corporate governance and other laws affecting employee benefits and executive compensation matters. He also advises a wide range of companies with regard to designing and drafting equity based and incentive compensation plans. Shane has extensive experience representing both executives and employers with respect to the negotiation and drafting of executive employment and severance agreements.
He regularly advises clients on the implementation and design of qualified and non-qualified employee benefit plans (including health and welfare plans, 401(k) plans, employee stock ownership plans and supplemental executive retirement plans). Shane also advises clients on a wide variety of ERISA issues, including plan reporting and disclosure, participation, vesting, funding, benefit accrual, fiduciary responsibility, prohibited transactions, plan termination, merger and employer withdrawal liability issues.
Shane Stroud’s practice focuses on a wide variety of matters in the areas of employee benefits and executive compensation, including …
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About Freed Maxick CPAs
Freed Maxick CPAs, P.C. advises public and private companies on ways to enhance profitability, save taxes, improve accountability and preserve wealth. With over 300 professional and administrative personnel, Freed Maxick operates with five major practices: Accounting & Auditing, Tax, Consulting, Employee Benefits and Asset-Based Lending (ABL). The Firm’s Employee Benefit Plan practice has extensive experience providing retirement plan audits to publicly and privately held companies. Freed Maxick is also a member of the AICPA Employee Benefit Plant Audit Quality Center, and has been since inception. The Firm currently performs over 100 Employee Benefit Plan audits each year, and has a core group of over 30 people who have been trained in the numerous rules and regulations impacting this highly specialized industry.
About Hawkins Parnell Thackston & Young LLP
Over the last half century, Hawkins Parnell Thackston & Young LLP has grown to include more than 150 lawyers in nine offices located in Atlanta, Austin, Charleston, Dallas, Los Angeles, Napa, New York, St. Louis and San Francisco. We represent some of America’s largest corporations, small local businesses and individual clients in high risk litigation and business disputes across the country in all 50 states. As national leaders in their fields of expertise, our ESOP, Employee Benefits, M&A, Tax & ERISA group brings extraordinary depth in perspective when advising clients in connection with retirement plans, equity incentives, executive compensation, shareholder issues, fiduciaries, mergers and acquisitions, and employment and benefits litigation throughout the country.
About Cadwalader, Wickersham & Taft LLP
At Cadwalader, Wickersham & Taft LLP, we put over 200 years of legal experience and innovation to work for you today. As one of the world's most prominent financial services law firms, we have long-standing client relationships with premier financial institutions, Fortune 500 companies and other leading corporations, government entities, charitable and health care organizations, and individual private clients. We have earned a reputation for crafting innovative business and financial solutions and developing precedent-setting legal strategies to achieve our clients' goals. The result is simple: We stand out from our competition because we help you stand out from yours. Find out what makes us different.