Editor: Mr. Projansky, would you tell our readers something about your professional experience?
Projansky: I am a native New Yorker and graduated from NYU School of Law in 1997. I became a partner in Proskauer's Employee Benefits and Executive Compensation Law Group in 2005, and within that area, I advise clients on the full spectrum of employee benefits issues. My core practice is as diverse as Proskauer's client base, although I have developed a focus in a couple of industry sectors, such as entertainment, media and financial services. In light of double-digit compensation increases, medical expense inflation, unprecedented market declines earlier in this decade and a variety of legislative and regulatory developments affecting pension plans, I have been called upon to act not only as an advisor to my clients but also as a partner in addressing the problems they, and their respective industries, face in this area.
Let me say, in addition, that one of the things that attracted me to Proskauer when I left law school was that it was one of the few firms at the cutting edge in the employee benefits field, in which I was determined to practice. Over the past ten years I have come to realize that the firm's strength in this practice area, as in so many others, is a function of not only knowing the law but also in its creative problem- solving abilities and its desire to partner with clients in meeting their challenges.
Editor: In addition to your career as a practitioner in the employee benefits area, you have been very involved in pro bono activities. Would you give us an overview of this aspect of your professional life?
Projansky: At the moment I am leading a team of approximately ten Proskauer lawyers from four of our offices representing A Journey For 9/11, a charity established by former New York Giants great George Martin. He is going to walk from the George Washington Bridge to the Golden Gate Bridge in an effort to raise ten million dollars to assist first responders to the 9/11 attacks in their healthcare needs. Our group is assisting with legal advice on organization and incorporation, tax-exempt status, charitable contribution deductions, corporate governance, copyright and trademark issues, and the like. This is a very exciting project for us not only because of the impact of 9/11 on New York City but also because of the enormous sacrifice of these first responders.
Otherwise, much of what I do in the pro bono arena relates to what I do for paying clients. Most recently, for example, a colleague and I assisted a local inner city boys and girls club avoid substantial Department of Labor penalties related to the club's 401(k) plan. There is immense satisfaction in knowing that an organization's assets are going to benefit disadvantaged children rather than used to pay government imposed penalties.
Editor: You are also involved in a great deal of speaking and writing. How does this impact your practice?
Projansky: Quite extensively. As you would imagine, employee benefits is a very specialized, very technical area of legal practice. Speaking and writing helps me stay abreast of the latest developments in the law, which are constant and ongoing. This type of activity, in addition, provides a great boost to my practice in that it projects a very positive image of my practice group among the constituencies that are concerned with developments in the field. Perhaps the most important effect of speaking and writing, however, is that this activity generates questions: people ask difficult and thought-provoking questions in response to some article I have written or speech I have made at a seminar, and those questions enable me to understand not only the issues that my clients are facing but also those confronting the entire industry. The questions convey a real sense of the issues at the forefront of the employee benefits field, and that enables me to anticipate where a particular industry is heading, as opposed to simply reacting once it has arrived. Clients who come to a firm like Proskauer should (and do) expect us to stay on top and ahead of potential new developments - the issues they will confront tomorrow, not just the ones they are facing today.
Editor: Would you give us an overview of the group and its practice?
Projansky: We have almost 50 dedicated practitioners spanning employee benefits, executive compensation and benefits litigation. The practice spans several of our offices, with particular concentrations in New York and New Orleans, and we find ourselves engaged in matters all over the country. The size of the practice engenders a degree of specialization that is found at very few firms. For example, our litigators are full-time ERISA litigators engaged in no other activity, whereas our transactional attorneys can focus on the substantive practice without being called to take depositions and the like.
In addition, our executive compensation attorneys are able to focus their practice at the highest levels and are involved in advising both boards of directors and board compensation committees on the one hand and senior executives on the other. In light of the fact that industries vary in their compensation practices, they have expertise across a wide range of industries as well. Our benefits attorneys handle every aspect of employee benefits and are experienced in all of the variations in structuring and meeting compliance obligations from large public companies to private enterprises. The work concerns everything from compliance of tax-qualified pension plans to HSA design. The benefits lawyers also represent financial services clients in the development and marketing of many different products - private equity, hedge fund, brokerage and so on - which gives a depth of expertise to the practice that is, I think, unparalleled. Our knowledge of industry best practices across a wide range of industries adds value to our clients that is quite unique.
The clients include local, national and international enterprises, public employers, non-profit organizations and any number of different commercial undertakings, both public and private. We represent single employer and multiemployer benefit plans, collectively bargained plans, welfare plans and so on, including 401(k) plans, stock programs, tax-sheltered annuities, medical, disability, cafeteria and dependent-care plans. I would estimate that the plans we represent cover more than a million participants and include assets in excess of a hundred billion dollars.
Editor: Would you tell us about some of the major matters that you have handled in recent years?
Projansky: In recent years I have been involved in a number of high profile transactions, including the sale of several major sports franchises such as the Washington Nationals and the Florida Marlins. Other major transactions included the sale of various hospitals as part of the largest not-for-profit hospital bankruptcies in U.S. history. I have also represented some well known entertainment industry clients, movie studios and television networks and their various collectively bargained plans in addressing the management of their pension and healthcare benefits. The issues here revolve around rapidly escalating costs and increased balance sheet disclosures. In addition, I have counseled financial services and media clients concerning the implementation of voluntary buyout plans and involuntary severance programs, both for union and non-union employees.
In another interesting project, we serve as outside legal counsel to the independent fiduciary running the Westin Diplomat Resort and Spa in South Florida, one of the largest hotel and convention center projects in the U.S. The hotel is owned by a pension plan, so we are called upon to address a variety of ERISA issues related to the ownership and operation of the hotel. In another recent matter, I represented the fiduciary committee of one of the largest companies in the world in the complete redesign of investment options for its 401(k) plan, which had over ten billion dollars in assets.
Editor: As you know, our readership consists of general counsel and the members of corporate legal departments. What are the key issues that a practitioner with your background should call to the attention of corporate counsel?
Projansky: For me, three issues stand out. The first, and perhaps the most important because it is on the minds of senior management, concerns the impending deadline for Code 409A, which governs deferred compensation plans. This is an area of particular concern because 409A not only applies to traditional deferred compensation arrangements but also to undertakings that are not traditionally thought of as deferred compensation, such as split dollar life insurance, severance arrangements, certain equity arrangements, and so on.
A second key issue is the implementation of the Pension Protection Act in 2006. This is a 900-plus page law often described as the most significant benefits legislation since ERISA. The law is so broad in scope that there is virtually no company of any reasonable size, whether public or private, that is unaffected. The reason I call special attention to it is that few companies have the resources to address all of the provisions that might be applicable to its benefits administration. Or, in the case of a financial services company, to its benefits products. Accordingly, this statute adds an entirely new layer of potential liability and requires the advice of specialists in the area.
A third issue for general counsel concerns the continuing growth of employee benefit plans, which guarantees that there will be ongoing and perpetual lawsuits related to plan administration and design. As my ERISA litigation partner, Howard Shapiro, often notes, people sue employee benefit plans because that's where the money is. These suits can relate to anything from 401(k) provider fees to the reduction of retiree medical benefits, but they share one common attribute - they are increasing in number because plans are repositories of extraordinary amounts of money. It is important for corporate counsel to consult with expert outside counsel on a variety of fiduciary and plan compliance issues in order to mitigate the risk of loss when these suits arise.
Editor: I am interested to know whether the heightened awareness of compensation and benefits on the part of the investing public is having an impact on your practice.
Projansky: It certainly is. One area where that awareness is most pronounced is in defined benefit plan funding. Two things are happening here. First, companies are seeking ways to reduce risk within their defined benefit plans and their health benefit plans because they know that liabilities associated with those plans will fall through to their bottom line and do such things as impact their bond ratings. Second, many companies, instead of reducing risk, are attempting to eliminate it altogether. Thus, given sensitivities to the rising cost of health care and volatility in the markets (which has only been exacerbated recently), many employers are simply terminating retiree benefits and defined benefit plan coverage entirely and switching to new benefit plan designs. There are a myriad of legal issues that arise when companies take these actions, and we have found that addressing them in ways that keep our clients in compliance is an increasing part of our practice.
Editor: What about the future of the group?
Projansky: It is part of our strategic plan to continue the growth of the Employee Benefits and Executive Compensation Law Group in two areas. As the firm's private equity and transactional practices continue to expand, we expect to play an increasingly important supportive role in complicated fund formation and corporate and real estate transactions. In addition, we hope to continue to expand the number of large institutions, both public and private, to which we provide the highest level of legal advice in every aspect of executive compensation and benefit plan administration and compliance. On both counts we are poised to meet the challenges.
Published September 1, 2007.
