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Hot Potatoes! Update on Handling Underfunded ERISA Pensions


Speaker(s): Ira M. Golub, Michael P. Barry, Robert C. Fleder, Suzanne Kelly
Recorded on: Dec. 15, 2014
PLI Program #: 128356

Ira M Golub
Partner
Labor & Employment
Employee Benefits, Executive Compensation & ERISA Litigation


Ira M. Golub is a Partner in the Employee Benefits, Executive Compensation and ERISA Litigation Practice Center. He practices exclusively in the employee benefits area. The nature of Ira’s practice embraces virtually all aspects of employee benefits law, ranging from the establishment and design of pension, profit-sharing, welfare and executive compensation plans to the administration and termination of such programs.

Ira works regularly with both single employer and multiemployer pension, welfare, annuity, vacation and apprenticeship funds. He serves as fund counsel to numerous multiemployer funds in a variety of industries, providing advice to trustees and administrators in connection with the operation and maintenance of the funds. His understanding of the issues emanating from the operation of multiemployer funds is enhanced by his experience in effecting the termination and mergers of funds and representing contributing employers in disputes with employee benefit plans.

Ira has extensive experience representing employers in their efforts to manage withdrawal liability exposure. He has assisted numerous employers that have been assessed withdrawal liability in challenging, arbitrating and negotiating the settlement of such assessments. The fact that Ira formerly worked for an actuarial consulting firm and serves regularly as counsel to multiemployer funds that assess withdrawal liability enables him to bring a spectrum of analytical skills and a depth of experience when addressing withdrawal liability matters. He has provided advice to employers in connection with highly complex and multi-faceted withdrawal liability problems, worked intensively with all withdrawal  liability methods (including the hybrid withdrawal liability allocation method recently adopted by some large multiemployer funds) and given advice in connection with multiple withdrawal liability transactions involving liabilities in excess of a billion dollars. He has represented clients before the Pension Benefit Guaranty Corporation (PBGC) and has negotiated a number of agreements with the PBGC in transactional and other contexts (such as, for example, Section 4062(e) of ERISA). He has been a legal advisor in many situations involving bankruptcy and restructuring as it relates to withdrawal liability and pension underfunding.

Over the years, Ira has developed a particular capability representing plan sponsors and trustees in connection with the full range of fiduciary and other plan asset and investment issues. He also has a breadth of knowledge with respect to issues relating to welfare programs, and is considered a leading authority with respect to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) and Health Savings Account. Ira is often called upon to provide advice relating to managing and modifying significant employer retiree medical liabilities and obligations. He frequently has been involved in providing advice to large corporations in connection with reductions-in-force, and with respect to the full range of employee benefit aspects arising in corporate mergers and acquisitions. Ira also works with government sponsored employee benefit plans that are not subject to ERISA.

Ira has published the COBRA Handbook, a comprehensive text on COBRA that is updated annually. He is on the Editorial Advisory Board of the Journal of Pension Planning and Compliance and is a member of the Board of Editors of HR Advisor. In addition to having worked at a national actuarial consulting firm, Ira previously was a trial attorney for the National Labor Relations Board.


Michael P. Barry
President
Plan Advisory Services Group

Michael Barry is President of the Plan Advisory Services Group, a consulting group that helps financial services corporations with the regulatory issues facing their plan sponsor clients. He has had 38 years experience in the benefits field, in law and consulting firms.

Plan Advisory Services provides information concerning regulatory developments affecting defined benefit and defined contribution plans, focusing on the challenges, opportunities and consequences for sponsors regulatory changes present.

Before founding Plan Advisory Services, Mike was a Managing Director at Bankers Trust and, before that, the New York benefits partner at LeBeouf, Lamb, Greene & McRae. He writes a regular column for Plan Sponsor Magazine (Barry's Pickings) and blogs at moneyvstime.com.


A partner and chair of the firm’s Employee Benefits and Executive Compensation Group, Robert Fleder has handled ERISA, employee benefits and executive compensation matters for over 40 years. Described in The Best Lawyers in America as “without question the ‘Dean of the Bar’ in his practice area globally, period,” Rob is recognized as one of the leading lawyers in the United States in the area of employee benefits and executive compensation by peer review organizations Chambers USA and The Legal 500, and has been listed in The Best Lawyers in America for Employee Benefits (ERISA) Law (New York City) since 1987. Additionally, Human Resource Executive lists Rob among the “Nation’s Most Powerful Employment Attorneys – Employee Benefits and ERISA.”

EXPERIENCE

Rob has extensive and sophisticated experience in the legal, accounting, actuarial and human resource issues connected with the implementation and operation of employee benefit plans and executive compensation arrangements. In numerous merger and acquisition transactions, he has addressed the issues that arise in connection with the assumption of (or failure to assume) benefit plans and other employee obligations. His major transactions include representation of the airline pilots who led the successful multi-billion dollar effort to have employees acquire a majority stake in United Airlines through an ESOP.

Rob has been involved in defending and settling significant ERISA fiduciary claims involving private plaintiffs and the Department of Labor. Rob regularly advises about ERISA fiduciary matters for investment funds and plan fiduciaries. Corporate bankruptcies often require major support on benefits and executive compensation, and Rob regularly participates in restructuring and reorganization transactions of every type. In particular, he has significant experience dealing with troubled pension plans, including dealing with PBGC, the federal agency that insures underfunded pensions when a plan sponsor fails, and dealing with multiemployer pension plan withdrawal liability.

Rob has provided employee benefit and executive compensation advice in connection with high-profile, multi-billion dollar and cutting-edge transactions, including:

  • AbitibiBowater Inc., and certain U.S. and Canadian subsidiaries, as U.S. bankruptcy and securities counsel in their complex U.S. chapter 11 and Canadian insolvency proceedings;
  • General Atlantic Partners and Kohlberg Kravis Roberts & Co. in their $1.65 billion acquisition of TASC, Inc., a provider of advanced systems engineering and technical assistance to the defense, intelligence, federal, state and local markets, from Northrop Grumman;
  • JH Investments, Oaktree Capital Management and TPG Capital in their $1.2 billion acquisition of the North American home building business of Taylor Wimpey, the U.K.’s second-largest home builder;
  • KPS Special Situations Fund in connection with several U.S. and non-U.S. turnaround and carve-out acquisitions in manufacturing, transportation, auto parts and other industries;
  • Oak Hill Capital Partners in the $900 million sale of its portfolio company Primus International, a leading supplier of highly engineered metallic and composite parts, kits and assemblies to the global aerospace industry, to Precision Castparts Corp;
  • Oaktree Capital Management, LP as the primary sponsor in the reorganization of Aleris International, Inc., a global leader in aluminum rolled products, extrusions and recycling, allowing Aleris to emerge from chapter 11 protection;
  • RSC Holdings in its $4.2 billion merger with United Rentals, creating a leading North American equipment rental company that is expected to accelerate United Rental’s growth with industrial customers;
  • Time Warner Cable Inc. in its $3 billion acquisition of Insight Communications Co., owned by the Carlyle Group, MidOcean Partners and Crestview Partners, in a transaction that joins two of the ten largest U.S. cable operators; and
  • Warner Music Group in its $3.3 billion going private sale to Access Industries.

Rob is a member of the Executive Committee of the Tax Section of the New York State Bar Association and a member of the American Bar Association and has written and lectured extensively. He is a past co-chair of the Employee Benefits Committee of the Tax Section of the New York State Bar Association.

EDUCATION

J.D., Columbia Law School, 1973

M.A., Columbia University, 1971

B.A., Columbia College, 1969

RECOGNITIONS

Chambers USA

The Legal 500

The Best Lawyers in America


Suzanne Kelly, Co-Founder and Principal
Kelly Garfinkle Strategic Restructuring LLC

Before launching Kelly Garfinkle Strategic Restructuring, Suzanne Kelly served as a Senior Financial Analyst with the Pension Benefit Guaranty Corporation (PBGC) in Washington, D.C. She joined the agency in 1991 stayed until 1997. In 2003 she returned to the PBGC to work on major restructurings involving complex pension issues.

For PBGC, Suzanne Kelly led multi-disciplinary teams including lawyers, actuaries, outside professionals and management in various cases where she was responsible for developing the case strategy, including in response to distress termination and Minimum Funding Waiver requests. Kelly represented the PBGC on numerous bankruptcy unsecured creditors’ committees for reorganizing and liquidating companies that sponsor defined benefit pension plans. In addition to issues of financing, operational changes, asset sales, supplier settlements, plan distributions and waterfall issues, these committees frequently address issues related to pension plans sponsored by the debtors in numerous countries.

For AMR/American Airlines, Suzanne Kelly led the team responsible for securing the survival of four large pension plans with over 100,000 participants and a $10 billion exposure to the PBGC. She represented the agency on the creditors’ committee and worked directly with major financial creditors on issues related to the merger with US Airways and value allocation.

She also led the termination of the Nortel Networks pension plan for the PBGC and, as a creditor committee member, worked on issues including asset sales, proceeds allocation and pension issues related to the world-wide liquidation of Nortel assets and the wind up of underfunded pension plans in the United States, Canada, and the United Kingdom. For St. Vincent’s Catholic Medical Centers in New York, in the first bankruptcy, she negotiated the continuation of the pension plan and additional funding to the pension when creditors were receiving 90 plus-cent distributions. In the second filing, she led committee efforts to increase the value received for real estate and negotiated settlements that produced recovery for the PBGC. Kelly took a lead role for the PBGC in cases involving Kaiser Aluminum & Chemical Corporation, Delta Air Lines, LyondellBasell, Chemtura Corporation and Quebecor, Inc. (now known as World Color Press) and many others.

Among her accomplishments at the PBGC, Kelly developed a major study on the health care industry and led development of a financial model that assessed PBGC’s exposure to hospital pension plans based on the sponsor’s operational and financial data.

Prior to joining the agency, Suzanne Kelly was Senior Consultant to S&J Consulting, Inc. where she worked with a privately held company to restructure financial obligations, the Acquisition Management Branch (AMB) at the Immigration and Naturalization Service and the Department of Housing and Urban Development.

Suzanne Kelly holds a Bachelor of Economics from the University of Maryland, a Masters of Economics – International Development Banking from American University, and holds a Certified Insolvency & Restructuring Advisor Certification.