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Disbursement of settlement benefits is the last and most anticipated step in class action settlement administration. A successful disbursement requires a settlement administrator to be skilled in analysis and calculation. It demands the utmost attention to detail.
Settlement fund management
CAA manages all aspects of the settlement fund. We open disbursement accounts and reconcile the account after the disbursement is made. When appropriate, CAA establishes a Qualified Settlement Fund (QSF) and files the appropriate tax returns. We can also serve as Escrow Agent, which we have done for funds as large as $100 million.
One of the key tasks of a settlement administrator is to accurately calculate the benefit due each class member. CAA possesses the expertise to implement even the most complex benefit allocation methodology and apply it to individual class members.
CAA has distributed nearly a billion dollars in settlement benefits in the form of checks and non-check benefits (e.g., gift cards). To minimize check fraud, we utilize the issuing bank's fraud prevention services. We also have the capability to distribute electronic benefits, such as discount codes, by e-mail. CAA will safely and quickly distribute benefits to class members regardless of the form of settlement benefit.
Tax withholding and reporting
CAA manages tax reporting for settlement disbursements. This includes the issuance of tax statements, such as W-2s and 1099s, to class members. We calculate the payroll withholding and employer taxes often required in employment class action settlements. CAA partners with a respected CPA firm to prepare settlement fund tax returns.