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The Employee Benefits Group includes lawyers from our Tax Practice Group who concentrate in employee benefits work. The practice covers five broad categories of legal services:

Pension and Profit Sharing, Including 401(k) Plans

Members of the group assist in the design and implementation of tax-qualified pension and profit sharing plans and prepare the necessary legal documentation. We counsel employers about the advantages and disadvantages of various types of retirement plans, including their financial, administrative and legal aspects. This has included innovative “cross-tested” plans that address the problems created by the cap on plan compensation.

We have guided a number of defined benefit pension plans through the termination process, ranging in size up to $60 million. Compliance problems have led our clients through the Internal Revenue Service’s Voluntary Correction Program (VCP) and the Closing Agreement Program (CAP).

Investments are a common concern of both single-employer and multiemployer qualified plans. We counsel plans and money managers on the appropriate procedures for selecting and monitoring plan investment managers. Our work also includes advising on asset valuation issues and use of plan brokerage to generate “soft dollar” services.

We also counsel on prohibited transaction issues and obtain regulatory exemptions. One such exemption involved an investment by qualified plans in Boeing 747 aircraft. As the U.S. Department of Labor has stepped up its enforcement efforts, we have represented clients in investigations of plan investment practices. One investigation attacked the sale of our client’s insurance products to pension plans.

We have significant experience in specialized retirement benefit arrangements for nonprofit employers. We have worked on tax-deferred annuity contracts for insurance carriers and on tax-deferred annuity plans for employers, often in combination with conventional tax-qualified plans to maximize benefits for executives. We have also established exempt status for a number of church plans.

Welfare Benefit Plans

As medical, life insurance, disability and other welfare-type plans have come under increasing government regulation, they have represented an increasing portion of our employee benefits practice. We have analyzed and counseled about COBRA requirements for continuation of health benefit coverage, the tax rules governing tax-exempt welfare benefit trusts, and disability and other discrimination issues. Establishment of flexible benefit plans is another growing part of our practice.

Executive Compensation

We have increasingly been called upon to give advice about and document supplemental executive retirement plans (SERPs) in response to limitations on benefits that can be provided through qualified plans. Such plans often involve “rabbi trusts,” which we have drafted and submitted to the IRS.

Design, implementation and documentation of stock option and phantom stock plans and “golden parachute” agreements also come within the scope of the group. We have devoted attention in recent years to severance arrangements, especially in connection with anticipated changes of control. Executives in some of the major corporations in the mid-Atlantic region have turned to members of our group to negotiate benefit packages upon severance from employment.

Employee Stock Ownership Plans

Members of the group have been involved in ESOP transactions from several points of view, having represented plan sponsors, their shareholders, ESOP lenders and independent ESOP trustees. We have kept on the cutting edge of new ESOP developments, including deferral of shareholders’ gain on sales of stock to ESOPs and use of ESOPs in employee leveraged buyouts.

Our Attorneys

Arthur N. Brandolph

Arthur N. Brandolph

215-751-2048

Philadelphia, PA

abrandolph@schnader.com

 215-751-2048 Philadelphia, PA
Carl J. Schaerf

Carl J. Schaerf

212-973-8005

New York, NY

cschaerf@schnader.com

 212-973-8005 New York, NY

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The Higher Calling Of The Law Requires...

Inclusion. When Pennsylvania Attorney General William Schnader left politics and sought to return to private practice in Philadelphia, he discovered that no major Philadelphia law firms would hire his protégé, Bernard Segal, a Jewish attorney. In response, in 1935, William Schnader, Bernard Segal and Francis Lewis formed a new law firm, Schnader & Lewis -- the first religiously integrated law firm in Philadelphia.

Innovation. Because Schnader was religiously integrated from its founding, many local clients in the Philadelphia area would not retain the firm in the 1930s and 1940s. Accordingly, the firm sought to represent larger, national companies.

Vision. Firm founder William Schnader was president of the National Conference of Commissioners on Uniform State Laws, which drafted and developed the Uniform Commercial Code. He successfully campaigned for the Code's adoption in 49 states.

The pursuit of freedom. At the request of President Truman, firm founder Earl Harrison, as Commissioner of the Immigration and Naturalization Service, toured displaced persons camps at the end of World War II and recommended to the President that displaced persons in Europe be permitted to resettle in Palestine. His report was a major factor that led to American support for the establishment of Israel.

The pursuit of justice. Firm founder Earl Harrison testified on behalf of an African-American student denied entry to the University of Texas School of Law because of his race. The case challenged the "separate but equal" doctrine, as applied to state law schools and laid the foundation for Brown v. Board of Education. The Supreme Court eventually overturned the lower courts' decisions and ordered the University of Texas to admit qualified black applicants.

Courage. Firm founder Bernard Segal convinced the Philadelphia bar to defend nine accused Communists pro bono. The defendants were convicted but their cases were thrown out on appeal. As a result, the Justice Department abandoned Smith Act prosecutions across the country.

The pursuit of justice. When George Wallace threatened to block integration of the University of Alabama, Schnader’s Bernard Segal drafted a statement in opposition. He and Jerome Shestack called lawyers all over the country requesting their support. The statement was published in the Birmingham News with 53 prominent lawyer signatories and provided support for President Kennedy's Executive Order federalizing the Alabama National Guard.

The pursuit of justice. In the wake of George Wallace's efforts to impede the integration of the University of Alabama, and at the urging of Schnader’s Bernard Segal, President Kennedy convened 244 lawyers at the White House to ask them to move the battle for civil rights and racial equality to the courts. The Lawyers’ Committee for Civil Rights Under Law was born and Jerome Shestack became its full-time executive director while continuing to practice at Schnader.

Inclusion. Firm founder Bernard Segal was chair of the ABA’s Committee on the Federal Judiciary. He advocated the appointment of federal judges of all genders and races.

Inclusion. Firm founder Bernard Segal was the first Jewish person to serve as Chancellor of the Philadelphia Bar Association. He encouraged the bar into public service and expanded its racial horizons.

Inclusion. Schnader was one of the first major Philadelphia firms to hire a female attorney.

Diversity. Schnader was a founding member of the Philadelphia Diversity Law Group, which aims to increase the number of diverse attorneys in-house and in private practice.

Inclusion. The firm appointed Albert Dandridge as Chief Diversity Officer and charged him with increasing and developing our bench of diverse attorneys.

Service. The firm adopted Caton Village (now closed), a halfway house for women in Philadelphia, where we provided free legal clinics and social and educational activities for its residents.

Service. Schnader lawyers regularly represent undocumented children who were abused or abandoned by their parents. We help these children obtain guardians, stop removal proceedings, and begin the path to citizenship.

Service. As U.S. veterans waited an average of four years for a ruling on the denial of their disability benefits, Schnader attorneys led a campaign advocating for a solution to address the backlog.

The pursuit of justice. Schnader attorneys represented Guantanamo Bay detainees, advocating for fair treatment and due process against a byzantine legal landscape.

Service. With a nonprofit partner, Schnader attorneys and staff designed and taught a pilot life skills seminar for young adults aging out of the foster care system. The program included lessons on securing vital documents, opening a bank account, looking for jobs and going to an interview.

Service. Schnader attorneys help middle school students in Pittsburgh set up a youth court, prepare for mock trials and draft a bill of rights for their school. The students learn about Constitutional law, advocacy and restorative justice from participating in these programs.

Service. Bernard Segal, a founder of the firm, believed that Schnader's hallmark is its "dedication to the higher calling of the law," which he defined as "the lawyer's obligation to assume an active role in the pursuit of a just and ordered society, in helping to solve the emerging problems of social, economic and political importance, and to serve the public as his or her client, as she or he would serve a full-paying client."

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