Luke D. BaileyLuke Bailey Clark Hill
Luke D. Bailey
Luke Bailey concentrates his practice in employee benefits law and executive compensation. He has extensive experience in the tax and fiduciary requirements of qualified retirement and other employee benefit and executive compensation plans of both private and public corporations and state and local governments.
Luke’s practice consists primarily of designing, drafting, and advising on the operational compliance issues of qualified retirement plans (401(k) and defined benefit), nonqualified deferred compensation plans subject to Section 409A of the Code, and stock compensation plans. Luke also does a substantial amount of work in the area of employee welfare benefits, including counselling employers on the requirements of the Affordable Care Act. Luke’s experience includes both the federal income tax issues associated with these plans under the Internal Revenue Code and the fiduciary and related ERISA issues encountered by employee benefit plans under ERISA.
Luke has handled a large number of cases under the IRS's program for rehabilitating delinquent qualified retirement plans ("EPCRS," "VCP," and "Audit Cap") and cases with the U.S. Department of Labor's Employer Benefits Security Administration involving potential fiduciary breaches. He has extensive experience in representing plan sponsors in IRS and DOL audits of their employee benefit plans. Luke has also assisted employers in correcting document and operational failures under Section §409A of the Code (IRS Notices 2010-2016 and 2008-2013). He frequently provides recommendations concerning the tax and ERISA ramifications of corporate mergers and acquisitions on retirement, welfare benefit, and executive compensation plans.
A significant portion of Luke's practice consists of federal income tax compliance work for sponsors of governmental pension plans under IRC §414(d). His work in the executive compensation area includes the design, drafting, and provision of tax and legal advice concerning stock option plans, nonqualified deferred compensation, severance pay plans and arrangements, and executive employment agreements. A substantial portion of Luke's work in the area of executive compensation consists of advising companies and executives with respect to the "golden parachute" rules of IRC §§280G and 4999, the $1 million limit on public company deductions for nonperformance-based compensation under IRC §162(m), and the rules applicable to nonqualified deferred compensation under §IRC 409A.
Luke has acted as counsel in connection with the formation of many employee stock ownership plans ("ESOPs") and has also represented lenders in leveraged ESOP transactions. He has extensive experience with the unique problems that can arise in connection with the qualified retirement plans of medical and other professional service organizations, including the "affiliated service group" rules, employee leasing, and out-sourcing. He also has extensive experience in the areas of IRC §§403(b) and 457(b) and (f) plans of state and local governments, universities, and charities, and in welfare benefit plans, including medical plans, "cafeteria" plans, voluntary employee beneficiary associations ("VEBAs"), employee leasing and co-employment, COBRA, individual retirement accounts, and fringe benefits.
- Represented public and private companies in the design, drafting, adoption, approval, and administration of stock compensation plans.
- Successfully prosecuted of over 30 voluntary compliance submissions under the IRS Voluntary Compliance Program ("VCP").
- Represented over 100 individual executives in avoiding or mitigating the application of the golden parachute rules to change in control compensation.
- Obtained IRS private letter rulings classifying governmental pension plan payments as nontaxable on-duty disability benefits.
- Private Investment IRAs: The Good, The Bad, and The Dangerous, Strasburger's Tax Symposium (November 2017)
- Employee Gifts and Fringe Benefits: Tax Consequences and Reporting Obligations, San Antonio CPA Society (August 2017)
- Social Security Benefits from a Financial Planning Perspective, plus DOL's New Fiduciary Advisor Rules, Strasburger's Tax Symposium (November 2016)
- The Affordable Care Act after King v. Burwell, Strasburger's Tax Symposium (September 2015)
- Tax Aspects of Equity Incentive Plans for LLCs and LPs, Strasburger's Tax Symposium (September 2015)
- Cash Balance Pension Plans Retirement Savings on Steroids, Strasburger's Tax Symposium (August 2014)
- Affordable Care Act Changes, Strasburger's Tax Symposium (August 2014)
- Primer on $1M Cap on Deductibility of Non-Performance-Based Compensation Paid Annually to an Individual Executive by a Public Company, ACI Compensation and Benefits Boot Camp (June 2011)
- Primer on U.S. Federal Income Tax Rules Penalizing "Golden Parachutes" ACI Compensation and Benefits Boot Camp (June 2011)
- HSA's, Strasburger Tax Symposium (June 2007)
- ERISA Fiduciary Duties After Enron Investment in Employer Stock and Other Issues, Strasburger Annual Tax Symposium (August 2002)
- IRS Audits of 403(b) "Plans" and Closing Agreements Under Rev. Proc. 99-13, Dallas Bar Association Employee Benefits/Executive Compensation Section (March 2000)
- The Alphabet Soup of Equity Compensation, Strasburger Tax Symposium (August 1999)
- Income and Wealth Transfer Tax Implications of Beneficiary Distribution Options Under Qualified Plans, IRAs, and Executive Compensation, Strasburger Tax Symposium (November 1998)
- ABCs of 404(c): Questions and Answers about Plan Sponsor Compliance, Institutional Investor Defined Contribution Forum (November 1994)
- IRS's APRS, VCR, and CAP Programs, San Francisco Area Women Tax Lawyers (July 1994)
- Co-author. IRS and Treasury Give Back Significant Ground on Governmental Plans Normal Retirement Age Definition, Strasburger Governmental Newsletter (June 2012)
- Co-author. Code § 414(d) Advance notice of Proposed Rulemaking Raises Many Issues for Governmental Pension Plans, Strasburger Governmental Newsletter (April 2012)
- Application of Final Normal Retirement Age Regulations (Treas. Reg. § 1.401(a)-1(b)) to Governmental Plans, Particularly Those Covering Public Safety Employees, Strasburger Governmental Newsletter (May 2010)
- Consumer-Driven Health Plans--What's the Buzz About, Health Industry Online (March 2006)
- IRC § 409A: The Blob that Swallowed Deferred Compensation, Strasburger Corporate Counsel Series (February 2005)
- Qualified Retirement Plans for Small Businesses and Professional Firms, White Paper (August 2003)
- A Primer on Employee Stock Purchase Plans Under IRC Section 423, White Paper (August 2001)
- Golden Parachutes Under IRC Sections 280G and 4999 Rules, Strategies, and Tactics, Strasburger Corporate Counsel Series (February 1999)
- A Primer on Participant-Directed Accounts Under the ERISA Section 404(c) Proposed Regulations, A Maxwell McMillan Pension and Profit Sharing Service Special Report (July 1991)
- 'Complete Discontinuance' of Contributions to a Profit Sharing Plan for Full Vesting Purposes, The Pension Actuary (December 1988)
- Named among The Best Lawyers in America – Employee Benefits (ERISA) Law by Best Lawyers (2013-2018)
- Named among Best Lawyers in Dallas for ERISA by D Magazine (2011-2013, 2016)