| ||Employee Benefits Considerations in Joint Ventures|
Susan P. Serota*
* Susan P. Serota is a partner in the New York City office of the law firm of Pillsbury Winthrop LLP.
In structuring corporate transactions, companies are increasingly utilizing joint ventures as a form of operating a business. It is necessary to understand the implications of join ventures on employee compensation and benefit issues. This Article discusses the tax consequences to both the employer and employee which may differ if the entity is taxed as a partnership or a corporation. Also discussed are qualified plan considerations, plans sponsor liabilities under Title IV of ERISA, multiple employer plans, nondiscrimination requirements, the use of pre-participation and imputed service and compensation credits under qualified plans, and the issues relating to participation by joint venture employees in ESOPs and other individual account plans with investment in securities of one of the partners. The Article also discusses incentive compensation and executive compensation issues in joint ventures, including the availability of ISOs and nonqualified options and recent issues arising under the final section 1032 regulations, and welfare plans in joint ventures, including issues relating to MEWAs.