ALI-ABA Topical Courses Fiduciaries Facing New Investment Advice Rules, Health Reform & Changing Fee Pressures June 9, 2010 Video Webcast PROGRAM SCHEDULE FACULTY PARTICIPANTS FACULTY BIOGRAPHIES STUDY MATERIALS TABLE OF CONTENTS 1. What s Up in Washington, Effects on You and Your Clients By John J. Sohn 2. Proposed Rule: Department of Labor, Employee Benefits Security Administration, Investment Advice Participants and Beneficiaries 3. Letter regarding From 5500 (March 4, 2010): Department of Labor, Employee Benefits Security Administration Page ix 4. DOL/EBSA Field Assistance Bulletins 61 Field Assistance Bulletin No. 2010-01: Annual Reporting and ERISA Coverage for 403(b) Plans 62 Field Assistance Bulletin No. 2009-02: Annual Reporting Requirements for 403(b) Plans 70 Field Assistance Bulletin No. 2007-02: ERISA Coverage of IRC 403(b) Tax-Sheltered Annuity Programs 74 5. Analysis of Cases 81 Conkright v. Frommert: People make Mistakes. The Supreme Court Likes Court Deference to Plan Administrators--PowerPoint Slides by T. David Cowart 82 Johnson v. Couturier 2009 WL 2216805 (9th Cir. July 27, 2009)--Case Summary - W. Waldan Lloyd 92 Fernandez v. K-M Industries Holding Co. N.D. Cal. No. C06-7339 CW, August 21, 2009--Case Summary - W. Waldan Lloyd 94 In re: Citigroup ERISA Litigation, 2009 U.S. Dist. LEXIS 78055 (S.D.N.Y. August 31, 2009) -- Case Summary - Erin Sweeney 96 6. Health Reform 99 Links to the statutes 100 Health Care Reform Implementation Timeline 101 To Grandfather or Not to Grandfather: What Does It Really Mean? 111 The Basics of the Early Retiree Reinsurance Program 131 HHS Issues Early Retiree Reinsurance Program Guidance 137 Slides: The Early Retiree Reinsurance Program: Interim Final Rule with Comment Period vii 140 xi xiii 1 41 53
HHS: Early Retiree Reinsurance Program Interim final rule with comment period May 5, 2010 75 Federal register 24450 163 viii
PROGRAM SCHEDULE Fiduciaries Facing New Investment Advice Rules, Health Reform & Changing Fee Pressures Wednesday June 9, 2010 12:00 pm - 3:15 pm EDT Program Schedule Eastern Central Mountain Pacific/Arizona Alaska Hawaii National Webcast Begins 12:00 p.m. 11:00 a.m. 10:00 a.m. 9:00 a.m. 8:00 a.m. 6:00 a.m. Adjournment 3:15 p.m. 2:15 p.m. 1:15 p.m. 12:15 p.m. 11:15 a.m. 9:15 a.m.. Are you a fiduciary? Are your employees fiduciaries? Are you responsible for appointing or monitoring fiduciaries? Are you concerned that you might be a fiduciary? New investment advice rules, health reform, and changing fee pressures have a major impact on ERISA fiduciaries, and this program will help you learn about those changes. Invest little more than 3 hours from the convenience of your home or office to learn how fiduciary law affects you, and what s new in this rapidly changing field. Advance submission of questions for faculty is encouraged, so that these may be integrated into the discussion. Questions also may be submitted during the live webcast for response as time permits. Send advance questions to nmulloy-bonn@ali-aba.org. All registrants will receive automatic complimentary access to the seminar archives within a week of the broadcast. Program Schedule All times Eastern Daylight 12:00 pm Discussion begins 408(b)(2) regulations (if issued) Investment advice proposed regulations & comments 403(b) developments Employer stock in plans, including ESOPs Conkright v. Frommert Health Reform fiduciary issues Jones v. Harris Associates Small employer matters, including electronic signature, & voluntary compliance program 3:15 pm Adjournment Total 60-minute hours of instruction: 3.0; Total 50-minute hours of instruction 3.6. Suggested Prerequisite: Limited experience in subject matter Educational Objective: Acquisition of knowledge and skills to develop proficiency as a practitioner; maintenance of professional competence as a practitioner; provision of information on recent legal developments Level of Instruction: Intermediate ix
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ALI-ABA Topical Courses Fiduciaries Facing New Investment Advice Rules: Health Reform June 9, 2010 Video Webcast PLANNING CHAIRS Roberta Casper Watson, Esquire Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA 2700 Barnett Plaza 101 East Kennedy Boulevard Tampa, FL 33601 T. David Cowart, Esquire Sonnenschein Nath & Rosenthal LLP 1717 Main Street Suite 3400 Dallas, TX 75201-4612 FACULTY Louis J. Campagna, Jr., Esquire Chief, Division of Fiduciary Interpretations and Regulations U.S. Department of Labor 200 Constitution Avenue, N.W. Room N5649 Washington, DC 20210-0001 W. Waldan Lloyd, Esquire Callister, Nebeker & McCullough 2180 S. 1300 East Parkview Plaza Suite 600 Salt Lake City, UT 84106-4462 Susan E. Rees, Esquire Senior Benefits Law Specialist, Division of Coverage, Reporting and Disclosure, Office of Regulations and Interpretations Employee Benefits Security Administration U.S. Department of Labor 200 Constitution Avenue, N.W Room N5669 Washington, DC 20210-0001 Fred Wong, Esquire Senior Pension Law Specialist Division of Fiduciary Interpretations U.S. Department of Labor Employee Benefits Security Administration 200 Constitution Avenue N.W. Room N5669 Washington, DC 20210-0001 xi
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FACULTY BIOGRAPHIES Planning Co-Chairs Roberta Casper Watson Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. Tampa, Florida Practice Area(s): ERISA, Employee Benefits and Compensation Additional Practice Areas: Benefits Litigation COBRA Planning Executive Compensation and Deferred Compensation Health and Welfare Plans Qualified Domestic Relations Orders (QDRO) Qualified Plans Roberta Watson joined the firm in 1985 and became a Shareholder in 1988. Her practice involves employee benefits, pension and profit sharing plans, 401k plans, health benefit plans, life and disability insurance plans, other welfare benefit plans, ERISA fiduciary law, employee stock ownership plans, COBRA and HIPAA compliance, deferred compensation, ERISA litigation support, and employee benefit aspects of family law. She graduated from the University of Idaho in 1971 cum laude with a BA in political science. In 1974 she earned her law degree from Harvard Law School. Roberta is a member of and past chair of the Employee Benefits Interest Group of the American Bar Association's Health Law Section and a member and past chair of the ABA Tax Section's Employee Benefits Committee. She is also past chair of the ABA's Joint Committee on Employee Benefits ("JCEB"). She is a charter fellow of the American College of Employee Benefits Counsel. She is also a member of the Hillsborough County Bar Association. Roberta is on the board of and past president of Northside Mental Health Center. She is also on the board of the Harvard Club of the West Coast of Florida. She is a member and past president xiii
of the Florida West Coast Employee Benefits Council. She is also a member of the American Law Institute and the Tampa Bay Pension Council. Education: Harvard Law School (J.D.) University of Idaho (B.A. in Political Science, cum laude) Bar Admissions: Florida Massachusetts Honors & Distinctions: AV Rated by Martindale Hubbell Best Lawyers in America (Employee Benefits Law) 1995-2009 Florida Super Lawyers 2006, 2007, 2009 T. David Cowart Sonnenschein, Nath & Rosenthal LLP Dallas, Texas Education: New York University School of Law, LL.M., 1979 University of Mississippi, J.D., with honors, 1977 University of Mississippi, B.B.A., with special distinction, 1975 Professional Profile: Mr. Cowart is a member of Sonnenschein's Employee Benefits & Executive Compensation Practice Group. He is nationally known in his field and specializes in retirement plans; health and welfare plans; deferred, equity and executive compensation; and related merger and acquisition work. He advises private equity firms on employee benefits and ERISA and ESOP matters, serves frequently as a speaker and has organized practitioner forums with the IRS in Dallas and in Washington, D.C. Mr. Cowart chaired the ABA Tax Section s employee benefits xiv
committee and spearheaded the ABA's ERISA CLE efforts. He was the first chairman of the American College of Employee Benefits Counsel. He is also a certified public accountant. His experience includes the following: Represented the independent fiduciary of a qualified plan owning employer stock in a $1.3 billion "going private" transaction Assisted in the management of a major cash balance conversion without challenge Obtained the first taxpayer-initiated voluntary settlement with the Dallas Key District for a disqualified retirement plan (second in the country) Obtained the first Internal Revenue Service determination that the conduct by a chain of church-sponsored hospitals does not constitute an election under section 410(d) of the Internal Revenue Code Obtained the first prohibited transaction exemption authorizing loans to a qualified plan to fund intra-plan investment transfers Involved in all aspects of ESOP leveraging transactions and curing of troubled or disqualified ESOPs, including an ESOP under joint Internal Revenue Service and Department of Labor audit Involved in health plan documentation and operations for Fortune 100 companies Obtained the first court decision (unpublished) that a golden parachute payment was not compensation for a pension computation Created the second nonqualified trust within a qualified trust to aid liquidation of a qualified plan invested in illiquid real estate Represented the professional fiduciaries in several of the region s banking institutions Mr. Cowart is on the editorial board of prominent professional publications and has published in various journals, including Tax Management Compensation Planning Journal, NYU Review of Employee Benefits and Executive Compensation and Mississippi Law Journal. He is listed in Best Lawyers in America and is recognized by his peers as a member of the American Law Institute, as a Texas Super Lawyer and as one of the Best Lawyers in Dallas. Admitted to the Bar: Texas Faculty Louis J. Campagna, Jr., Washington, D.C. U.S. Department of Labor Chief, Division of Fiduciary Interpretations, Office of Regulations and Interpretations, Employee Benefits Security Administrations B.A., University of Notre Dame; J.D., University of South Carolina Mr. Campagna heads the Division of Fiduciary Interpretations, which is responsible for interpretive and regulatory matters including the qualified domestic relations orders, fiduciary responsibility, and preemption. In addition to carrying out the agency s regulatory agenda and interpretive activities, the Office of Regulations and Interpretations also xv
coordinates regulatory and interpretive activities with other federal agencies and plays a major role in the development, analysis and implementation of pension and health care policy issues. Mr. Campagna is a frequent speaker at professional education programs, including ALI-ABA s annual courses, Pension, Profit-Sharing, Welfare, and Other Compensation Plans, and Investment Adviser Regulation, and TV/webcast updates on employee benefits. W. Waldan Lloyd, Salt Lake City, Utah Callister, Nebeker & McCullough W. Waldan Lloyd received his law degree from the University of Utah in 1974. He is admitted to practice before the Utah State and Federal Courts, the United States Tax Court and the Tenth and Eleventh Federal Circuit Courts of Appeals. He is a member of the Utah State Bar Association, the American Bar Association, the Utah State Bar Tax Section, the American Bar Association Sections on Taxation and Labor and the Taxation Subcommittee on Employee Benefits. He is a Charter Fellow of the American College of Employee Benefits Counsel. He is also vice-chair of the ESOP and Fiduciary Responsibility and Litigation Subcommittees of the ABA Section of Taxation Employee Benefits Committee. He is a past director and president and current steering committee member of the Western Pension and Benefits Conference (WBPC), Salt Lake Chapter, a past member of the WPBC Joint Program Committee, and co-chaired the WPBC 2002 Annual Meeting. He was a six-year member of the EP:EO Council for the Dallas Key District of the Internal Revenue Service and chaired the Council for two years. He was also a member of the TE/GE Council for the Central Mountain Area of the Internal Revenue Service and chaired the Council for two years. He currently chairs the IRS Pacific Coast Area TE/GE Council. Mr. Lloyd chairs the firm's Employee Benefits Section and is a shareholder of the firm. His clients include sole proprietors, professional corporations, closely held corporations, public corporations, charitable and other tax-exempt entities and governmental entities. Mr. Lloyd drafts and advises on all forms of retirement plans, as well as VEBAs, welfare benefit programs, cafeteria plans, and COBRA compliance. Clients' plans range in size from single participant plans to those covering tens of thousands of employees. Mr. Lloyd also provides consulting on ERISA compliance matters, including: acting as an independent trustee; advising plan trustees in connection with plan transactions, including those involving decisions to accept tender offers, to purchase publicly traded securities on a xvi
leveraged basis, and to sell plan assets; defending plan fiduciaries accused of fiduciary breaches; representing plan participants with claims against fiduciaries for violations of ERISA; representing plans and plan fiduciaries with respect to employee benefit claims; plan mergers and spin-offs; leveraged ESOP buy-outs; applications for prohibited transaction exemptions; IRS plan audits, DOL investigations, and PBGC audits of plan terminations. Mr. Lloyd frequently lectures on pension and welfare benefit-related issues, and has spoken to numerous professional groups and associations, including the American Bar Association, American Academy of Actuaries, American Society of Pension Professionals & Actuaries, the Conference of Consulting Actuaries, the Society of Actuaries, the Southwest Benefits Association, the National Business Institute, the Utah State Bar, the Western Benefits Conference, the West Florida Pension and Benefits Association, the Utah Association of Financial Planners, the Utah Association of CPAs and the American Academy of Matrimonial Lawyers. Susan Elizabeth Rees, Washington, D.C U.S. Department of Labor Senior Benefits Law Specialist, Division of Coverage, Reporting and Disclosure Office of Regulations and Interpretations, Employee Benefits Security Administration Government Service: U.S. Department of Labor, Office of the Solicitor, Plan Benefits Security Division, Washington, D.C; U.S. Equal Employment Opportunity Commission, Office of the General Counsel, Washington, D.C. Honors: Fellow, American College of Employee Benefits Counsel Memberships: ALI/ABA Faculty 1992 to Present; World Wide Employee Benefits (WEB)(Steering Committee); American Bar Association, Tax Section Fred Wong, Esquire, Washington, D.C. U.S. Department of Labor Senior Pension Law Specialist, Division of Fiduciary Interpretations, Office of Regulations and Interpretations, Employee Benefits Security Administration xvii
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