ALI-ABA Topical Courses

Employee Benefits Law and Practice Update: Spring 2010

May 5, 2010

Video Webcast

TABLE OF CONTENTS

Page

PROGRAM AGENDA ix

FACULTY PARTICIPANTS xi

FACULTY BIOGRAPHIES xiii

STUDY MATERIALS

1. PPACA Key Provisions

By The Groom Law Group

1

2. Links to the Two Statues Comprising Health Care Reform 29

3. Link to IRS Site on Small Employer Credit 31

4. Chart of Effective Key Dates

By The Groom Law Group

33

5.

Memo: Health Care Reform Legislation: Provisions Affecting

Employer-Sponsored Group Health Plans

By Sonnenschein Nath & Rosenthal LLP

39

6. IRS News Release IR-2010-53, April 27, 2010 Tax-Free Employer-Provided

Health Coverage Now Available for Children under Age 27

43

7. Notice 2010-38 Effective March 30, 2010 Tax Treatment of Health Care

Benefits Provided With Respect to Children Under Age 27

47

8.

Memo: PPACA $500,000 Compensation Deduction Limit on Health

Insurers May Have Broader Reach

By The Groom Law Group

61

9. HHS: Health Care Reform Insurance Web Portal Requirements (Interim

final rule with comment period)

67

10. Fact Sheet on Establishing the Web Portal Called For in The Affordable

Care Act

133

11. HHS: Early Retiree Reinsurance Program (Interim final rule with

comment period)

139

12. Fundamentals of Roth IRAs

By Pamela D. Perdue

221

13.

Memo: IRS Allows Limited Document Corrections for Section 409A

Compliance

By Sonnenschein Nath & Rosenthal LLP

243

14. Memo: DOL Releases New Proposed Investment Advice Regulation

By The Groom Law Group

247

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15.

Retirement Plan Issues in Dealing with Employees on Active Military

Duty

By Pamela D. Perdue

251

16.

What’s New in Employee Benefits in 2010: A Summary of Significant

Case Law Developments Since Fall 2009 (Including What’s New in

Employee Benefits: A Summary of Current Case and Other

Developments)

By Gregory C. Braden, Simon Torres, Roger C. Siske and Michael R. Maryn

283

17.

Memo: Conkright v. Frommert: Supreme Court Reinforces Deference to

Plan Administrator Discretion

By Sonnenschein Nath & Rosenthal LLP

473

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ALI-ABA Video Webcast Employee Benefits and Executive Compensation Update

Wednesday, May 5, 2010

Program Agenda

Topic Speaker(s) Materials

12:00 noon EDT Health Care Reform - immediate effective dates affecting employers AND key issues for insured vs. self-insured plans

Bill Sweetnam & Tom Reeder

Links to legislation and IRS tax guidance link (from Reeder)

Roth Conversions Pam Perdue & Bill Evans From Pam Perdue; new outline to be provided on Roth (NMB: do not use all of her three submissions from a while back)

409A corrections and practical problems

Steve Tackney & Pamela Baker

Use outline from March conference

Q&A

1:55-2:15 pm BREAK (approximate time)

Investment Advice Jenny Eller Jennifer Eller will provide

Military Leave rules - USERRA, HEART, SCRA

Pam Perdue Outline from March conference

Litigation Update Chris Weals Paper from conference (Greg

S march 2010 Pension Conference paper)

Panel Discussion of Conkright Case

Chris Weals leads discussion with all available panelists

Sonnenschein alert from Baker

3:50-4:00 pm Q&A

4:00 pm

All available panelists

Adjournment

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ALI-ABA Topical Courses

Employee Benefits Law and Practice Update: Spring 2010

May 5, 2010

PLANNERS/SPEAKERS Pamela Baker, Esquire Sonnenschein Nath & Rosenthal LLP 7800 Sears Tower Chicago, IL 60606

William F. Sweetnam Jr., Esquire Groom Law Group, Chartered 1701 Pennsylvania Ave., N.W. Washington, DC 20006

SPEAKERS Jennifer Eller, Esquire Groom Law Group, Chartered 1701 Pennsylvania Avenue N.W. Suite 1200 Washington, DC 20006-5811 William M. Evans, Esquire Attorney-Advisor, Benefits Tax Counsel’s Office U.S. Department of the Treasury 1500 Pennsylvania Avenue, N.W. Washington, DC 20220-0001 Pamela D. Perdue, Esquire Summers Compton Wells PC 8909 Ladue Road St. Louis, Missouri 63124

W. Thomas Reeder, Esquire Senior Benefits Counsel United States Senate Committee on Finance 219 Dirksen Senate Office Building Washington, DC 20510-0001 Stephen B. Tackney, Esquire Special Counsel to the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) Office of the Chief Counsel – Internal Revenue Service 1111 Constitution Avenue, N.W. Room 4300 Washington, DC 20224 Christopher A. Weals, Esquire Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue N.W. Washington, DC 20004-2541

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FACULTY BIOGRAPHIES Planning Co-Chairs Pamela Baker Sonnenschein Nath & Rosenthal LLP Chicago, Illinois Ms. Baker is chair of the firm’s national Employee Benefits and Executive Compensation Practice Group. She represents boards and compensation committees of public and not for profit businesses in executive compensation matters. She also handles non-qualified deferred compensation and equity incentive arrangements for both private and public entities, and represents employers and high-level executives in employment agreements, severance arrangements and golden parachute plans. In addition, her practice covers representation of employers in the design, implementation and administration of tax-qualified retirement plans (including 401(k) plans, defined benefit plans and ESOPs), ERISA representation of institutional fiduciaries and advice to financial institutions concerning ERISA issues arising in pension fund investing. Ms. Baker is a member of the board of directors of the American Bar Association Retirement Funds. She is Past Chair of the American Bar Association Taxation Section Employee Benefits Committee, and formerly chaired the Illinois State Bar Association Employee Benefits Section Council and the Chicago Bar Association Employee Benefits Committee. She is a charter member of the American College of Employee Benefits Counsel. Ms. Baker co-chairs the ABA-JCEB National Institute on Executive Compensation and the ALI-ABA Course of Study, Pension, Profit-Sharing, Welfare, and other Compensation Plans. She is also a member of the ABA Business Law Section Federal Regulation of Securities Committee where she has been active in dialogues with the SEC staff on matters involving Rule 16b-3, registration of nonqualified deferred compensation, Form S-8, Rule 701, implementation of the Sarbanes-Oxley Act, and executive compensation disclosure issues. Ms. Baker is nationally recognized as a leading practitioner in the employee benefits and executive compensation field, and is a frequent author and speaker. Recent topics include the intersection of federal securities laws with tax-qualified retirement plans, deferred compensation under Internal Revenue Code Section 409A, and IRS Executive compensation audits. Admitted to the Bar: Illinois Organizations: American Bar Association; American College of Employee Benefits Counsel Publications: "Employee Benefit Plan Exemptions Under Section 16," 59 Employee Benefits and Executive Compensation Counselor (1998) "Executive Compensation in Mergers and Acquisitions (Pts 1 and 2)," The Best In M & A -- Insightful Articles to Help You Get the Deal Done 159 (1996); 1983, 1987, 1990, 1994 IICLE Pension Practice Chapter on IRAs Bd. of Contributing Eds. -- Journal of Taxation of Investments (1984 - 88)

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Contributor, "Executive Compensation: A 1987 Road Map for the Corporate Advisor," 43 Bus. Law. 185 (1987). "Compensating and Protecting the Executive," 133 Employment Law Counselor 10 (2001). Education: University of Wisconsin Law School, J.D., 1976 Managing Editor, Wisconsin Law Review Smith College, A.B., with honors, 1972 William F. Sweetnam, Jr. Groom Law Group, Chartered Washington, D.C. Mr. Sweetnam joined Groom in May, 2005 and he co-chairs the Policy and Legislation Group. Before joining Groom, Mr. Sweetnam was the Benefits Tax Counsel in the Office of the Tax Policy at the U.S. Department of the Treasury. The Benefits Tax Counsel is the principal legal advisor to the Secretary of the Treasury with regard to all aspects of employee benefits taxation and related matters, including pensions, health care and executive compensation. While at Treasury, Mr. Sweetnam led the teams that provided guidance for Health Savings Accounts and Health Reimbursement Arrangements, the preliminary guidance regarding executive deferred compensation arrangements under Section 409A and the regulatory and legislative proposals regarding cash balance pension plans. In addition, Mr. Sweetnam was part of the Bush Administration's task force to restructure the defined benefit plan funding system (which resulted in the Pension Protection Act of 2006), and he testified before Congressional Committee on behalf of the Administration's proposal. Prior to his services at the Treasury Department, Mr. Sweetnam was Tax Counsel for benefits matters on the Majority Staff of the U.S. Senate Committee on Finance, under the chairmanship of Senator William V. Roth of Delaware. Honors & Distinctions Fellow of the American College of Employee Benefit Counsel Previous Experience Benefits Tax Counsel, Office of the Benefits Tax Counsel, Department of the Treasury Tax Counsel, Majority Staff, U.S. Senate Committee on Finance Technical Consultant, Towers Perrin Chief Counsel, Compensation and Benefits, Sun Company, Inc. (Sunoco) Professional Affiliations American Bar Association Employers Council on Flexible Compensation Co-Chair, ALI-ABA Program on Pension, Profit Sharing, Welfare and Other Compensation Plans Co-Chair, ALI-ABA Annual Fall and Spring Employee Benefits Video Update Editorial Board, Journal of Retirement Planning American College of Employee Benefits Counsel Education

J.D., Fordham University School of Law B.A., Rutgers University

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Bar & Court Admissions District of Columbia New York

Faculty Gregory C. Braden, Washington, D.C. Morgan, Lewis & Bockius LLP Mr. Braden is a partner in Morgan Lewis's Labor and Employment Practice and co-chair of the ERISA Litigation Practice. Mr. Braden concentrates his practice on ERISA litigation and has served as lead defense counsel in virtually every type of ERISA Title I class action claim, including 401(k) proprietary fund and fees claims, cash balance plan claims, retiree benefits claims, severance pay claims, Title II based pension claims, and multiple employer welfare arrangement (MEWA) claims. He has appeared as counsel in more than 140 ERISA cases. Mr. Braden has also practiced in the area of employee benefits, focusing on complex transactional issues such as employee stock ownership plan (ESOP) transactions. Mr. Braden is ranked in the top tier nationally in Chambers USA: America's Leading Lawyers for Business; is listed in The Best Lawyers in America, Best Lawyers in Washington, D.C. (The Washington Post Magazine) under Employee Benefits; is peer rated "AV" by Martindale Hubbell; has been named one of the "Top Ten" most powerful ERISA attorneys by Human Resources Executive magazine; and has been named a "Super Lawyer" by Corporate Counsel magazine. He is a fellow of the American College of Employee Benefits Counsel and has lectured extensively on ERISA litigation topics, giving presentations to the American Bar Association National Convention (New York), Taxation Section (Atlanta), the American Law Institute - American Bar Association (Washington, D.C., San Francisco), the national meeting of the Enrolled Actuaries (Washington, D.C.), the Bureau of National Affairs (BNA) (Washington, D.C.), the Professional Liability Underwriters Society (Los Angeles, New York, Atlanta), the State Bars of Georgia and Colorado, the Law Education Institute, the ESOP Association (Savannah, Georgia), the Southern Employee Benefits Conference (Palm Beach, Atlanta), and several other trade and professional organizations. Mr. Braden served as an adjunct professor at Emory University Law School and is a senior editor of the ABA's Employee Benefits Law treatise. He has written numerous articles on employee benefits topics that have appeared in the Benefits Law Journal, the Journal of Taxation and Regulation of Financial Institutions, the Journal of Compensation Planning and Compliance, and other trade publications. He has served as president of the Southern Employee Benefits Conference and is a member of the ESOP Association. Mr. Braden earned his J.D., with honors, from the University of Wisconsin Law School in 1982, where he was elected to the Order of the Coif and received the Dean's Academic Achievement Award and American Jurisprudence Awards. He earned his B.A., with honors, in mathematical economics from the University of Wisconsin-Milwaukee in 1979.

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Mr. Braden is admitted to practice in the District of Columbia and Georgia and has appeared before the federal courts of 21 states and several U.S. Courts of Appeals. Honors + Affiliations Listed, The Best Lawyers in America (2006–2009) Listed, Chambers USA: America's Leading Lawyers for Business Noted in The Legal 500 for Employee Benefits and Executive Compensation—ERISA Litigation Fellow, American College of Employee Benefits Counsel Listed, "Washington D.C.'s Best Lawyers" Under Employee Benefits, Washington Post Listed, Washington, D.C. Super Lawyer, Corporate Counsel Magazine Listed, Top Ten ERISA Attorneys, Human Resource Executive Listed, Top 100 Employment Attorneys, Human Resource Executive Peer rated “AV” by Martindale Hubbell Member, Tax and Labor Sections of the American Bar Association Member, District of Columbia Bar Member, State Bar of Georgia Member, State Bar of Wisconsin Member, ESOP Association Member and Past President, Southern Employee Benefits Conference Education

University of Wisconsin Law School, 1982, J.D., With Honors University of Wisconsin, 1979, B.A., With Honors

Jennifer Eller, Washington, DC Groom Law Group, Chartered Jennifer E. Eller is a principal with the Groom Law Group working primarily in the firm's fiduciary practice group. She advises large public plans, corporate plan sponsors, and financial institutions in connection with the investment of plan assets under U.S. law. She has negotiated complex investment agreements for large plan sponsors investing plan assets in collective vehicles designed to hold domestic and international real estate, make direct private equity investments, and utilize "fund of funds" approaches. She has also helped large plan sponsor clients (both public and private) negotiate direct investment management agreements with investment professionals who manage accounts exclusively for the benefit of a single plan or small group of related plans. These investment agreements have covered a range of investment styles and mandates. She also regularly advises clients on plan administration issues such as the proper allocation of plan expenses. Ms. Eller has also worked with banks, thrifts, insurance companies, and service providers on the creation and operation of financial products including collective investment vehicles. Previous Experience Environmental specialist conducting phase I environmental reviews of properties purchased for investment by large pension plan investors Job coach for developmentally disabled adults learning to work in community employment Practices

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Fiduciary Responsibility Education J.D., cum laude, Georgetown University Law Center B.A., magna cum laude, Avila College Bar & Court Admissions District of Columbia Maryland William M. Evans, Washington, DC Attorney-Advisor, Benefits Tax, Counsel’s Office U.S. Department of the Treasury

Pamela D. Perdue, St. Louis, Missouri Summers, Compton, Wells & Hamburg, P.C. Memberships: American Law Institute; ALI-ABA (former member, ALI-ABA Committee; Adviser, Program Subcommittee); American Bar Association (Tax Section: Employee Benefits Committee); Missouri Bar Association (Employee Benefits Committee); Bar Association of Metropolitan St. Louis (Past Chair, Section on Employee Benefits); Magna Trust Company Bank Advisory Board (1995-96) Publications: QUALIFIED PLANS: FORMS, NOTICES, AND SUPPLEMENTARY MATERIALS (ALI-ABA, 2007); QUALIFIED PENSION AND PROFIT SHARING PLANS (Warren, Gorman & Lamont/RIA, 1994 & Annual Updates); 457 ANSWER BOOK (contributing author)(Aspen Publishers, Inc.); EMPLOYMENT SEVERANCE ANSWER BOOK (chapter author)(Aspen Publishers, Inc.); PLAN TERMINATION ANSWER BOOK (Panel Publishers, 1999); Profit Sharing Plan And Trust Death Beneficiary Designation Form, ALI-ABA EST. PLAN. COURSE MATERIALS J. (Aug. 2007); EGTRRA And Related Amendments: Issues And Solutions (Part 2), ALI-ABA BUS. L. COURSE MATERIALS J. (Dec. 2006); What You Should Know About the Pension Protection Act of 2006, PRAC. TAX LAW. (Nov. 2006); EGTRRA And Related Amendments: Issues And Solutions (Part 1), ALI-ABA BUS. L. COURSE MATERIALS J. (Oct. 2006); Qualified Plan Provisions, Forms And Administration: Avoiding Trouble (With Sample Provisions), ALI-ABA BUS. L. COURSE MATERIALS J. (June 2005); “Drafting Plans to Reduce Risk of Loss in Litigation, J. OF TAX. AND EMPLOYEE BENEFITS; 10 Tips for Protecting Retirement Plans from Litigation, FINANCIAL EXECUTIVE INTERNATIONAL (Feb. 28, 2005); A Practical Guide to Helping Clients Select the Right Retirement Plan Design (Part 2), PRAC. LAW. (Oct. 2003); A Practical Guide to Helping Clients Select the Right Retirement Plan Design (Part 1), PRAC. LAW. (Aug. 2003); Retirement Plans for Corporate Directors, Consultants, and Other Self-Employed Individuals,

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ALI-ABA BUS. L. COURSE MATERIALS J. (April 2003); The New Determination Letter Procedures, PRAC. TAX LAW. (Nov. 2002); The Economic Growth and Tax Relief Reconciliation Act of 2001: Selected Employee Benefit Changes, PRAC. TAX LAW. (Aug. 2001); Paying Costs from Retirement Plans: When and How Much, PRAC. LAW. (July 2001); “Anti-Cutback Rules May Not Protect Subsidized Early Retirement on Sale of Employer,” J. TAXATION OF EMPLOYEE BENEFITS (March/April 1996); “Satisfying ERISA's Fiduciary Responsibility Requirements in the Wake of Potential Plan Changes,” J. PENSION PLANNING & COMPLIANCE (Fall 1996); J. TAXATION OF EMPLOYEE BENEFITS (Editorial Advisory Board); J. COMPENSATION AND BENEFITS (Editorial Advisory Board); J. PENSION PLANNING AND COMPLIANCE (Editorial Advisory Board) B.M., J.D., University of Georgia Adjunct Professor, Washington University School of Law Honors: “Best Lawyers In America” (2003-04) W. Thomas Reeder, Washington, DC Benefits Tax Counsel, Office of Tax Policy U.S. Department of the Treasury Stephen B. Tackney, Washington, DC Special Counsel to the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) Office of the Chief Counsel – Internal Revenue Service Christopher A. Weals, Washington, DC Morgan, Lewis & Bockius LLP Christopher A. Weals is a partner in Morgan Lewis's Labor and Employment Practice, specializing in employee benefits litigation. Mr. Weals has focused his practice on complex employment and benefits litigation for 20 years. He has represented employers in numerous class-action and multi-plaintiff suits involving allegations of breach of fiduciary duty, denial of benefits, discrimination and wage and hour law violations. He has also defended companies facing EEOC pattern and practice suits. </p> In 2006, Mr. Weals successfully defended US Airways in the first post-Enron "stock drop" case to go to trial. DiFelice v. US Airways, Inc., 436 F. Supp. 2d 756 (E.D. Va 2006). The US Airways case was named to the National Law Journal's "Defense Hot List" for 2006. Mr. Weals has published various articles on employment related issues, including several articles on employee privacy, and has spoken to variety of organizations, including the Society for Human Resource Management, the American Bar Association and the Washington Metropolitan Corporate Counsel Association.

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Prior to joining Morgan Lewis, Mr. Weals was a partner in the Washington, D.C. office of a prominent nationwide firm. He earned his J.D., cum laude, from Northwestern University School of Law, and his B.A., magna cum laude, from Denison University. Mr. Weals is admitted to practice in the District of Columbia and before the U.S. Supreme Court.

Education Northwestern University School of Law, 1985, J.D., Cum Laude Denison University, 1982, B.A., Magna Cum Laude

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