Examples of Our Impact on Client Employee Benefits Management.

 Example 1:  Entertainment Industry
Four hotels/casinos in Las Vegas were selling their assets to a single buyer. The hotels/casinos wanted to ensure no post-sale liability for any pension, health, or other welfare benefits. Each hotel had numerous labor contracts, including several that obligated the sellers to contribute to multi-employer pension funds. One of the funds was not sufficiently funded and the sellers' withdrawal from the fund could have resulted in liability of approximately $2 million. Due to our early involvement, the buyer agreed to contribute to the fund, thereby absolving the hotels/casinos from any liability for the underfunding. Also, we were able to demonstrate that the hotels/casinos had fully complied with ERISA and that the buyer could assume the plans without adverse tax or labor consequences. This resulted in the buyer agreeing to forego a $7 million retention of the sale price, and our client was able to use the entire proceeds of the sale freely.

 Example 2:  Nursing Home
Our client, operating a chain of nursing homes, had recently acquired an additional chain of homes and had switched from a fully insured health plan to a self-insured plan. While the self-insured plan saved healthcare dollars, the self-insured plan did not allow the company to allocate healthcare costs evenly among the various nursing homes. This in turn prevented the company from being able to fully bill Medicaid. The solution was to create a Voluntary Employees Beneficiary Association (VEBA) under §501(c)(9) of the Internal Revenue Code. The rules with respect to VEBA administration allowed the company to allocate healthcare costs evenly among the various homes. Our advice and involvement enabled the company to maximize its Medicaid billings, with a resulting improvement in gross revenue of approximately $5 million annually.

 Example 3:  Manufacturer
Our client, a manufacturer, had facilities in both Ohio and Tennessee. Each facility had a collective bargaining agreement with the Steelworkers, and each facility had its own defined benefit plan. The problem was that one plan was underfunded by about $2 million, while the other was overfunded by approximately $4 million. Through intense negotiations, the two local unions agreed to merge the respective plans, and labor counsel then obtained IRS approval of the merger. This eliminated the company's need to contribute to the underfunded plan, and it also enabled the company to offer an early retirement window to its more senior (and costly) employees. Additionally, the company had a defined benefit plan for salaried employees that was overfunded by approximately $4 million. As a result of our advice, the company terminated that plan, used about $1 million to start a new 401(k) plan, and recouped the remainder ($3 million) to finance continued operations.