Last December before panic set in, Congress passed the SECURE Act. Beginning in 2021, banks, insurance companies, and other financial institutions may begin offering Pooled Employer Plans (PEPs). A PEP is a 401(k) or profit-sharing plan with multiple, unrelated employers. Assets are ...
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Benefit Plans in M&A Deals – Avoiding That Call After the Deal Has Closed
Thankfully, mergers and acquisitions continue at a good pace even in this impacted economy. We do still see buyers and sellers that struggle with employee benefit due diligence issues though. Deal counsel often gets calls from their clients – after closing – about what wasn’t spotted. For ...
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If Our Company Chooses Not to Go with an ESOP, What Other Strategies Are There?
An Eligible Individual Account Plan (EIAP) may be a good option for a company that decides not to use an ESOP. We discuss this strategy in our video.
Transcript
If a company determines that an ESOP is not appropriate, the other principal method of buying or selling stock on a ...
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How Much Control Does the ESOP Trustee Have?
In this video, we discuss how much control the ESOP trustee has in the ESOP.
Transcript
Typically when we are presented with this question, it's out of a concern that putting the shares in the hands of a trustee is going to result in the trustee being involved in the operation of the ...
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How Much Control Do Employees Get?
In an ESOP, how much control do employees have? Watch our video to learn more.
Transcript
It's first important to remember that the employees are not the shareholders of the corporation. The ESOP and the ESOP trustee own the shares. The ESOP trustee is the legal titleholder to ...
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How Is Stock Allocated Within the ESOP?
Learn the ways stock can be allocated with an ESOP in our video.
Transcript
Most often stock is allocated with an ESOP and proportioned to the compensation of the employees that are in the plan. It's also possible, however, to design a formula in an ESOP that allocates stock in rate ...
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ESOPs Can Help Narrow Racial Wealth Gaps
It is highly researched and widely known that too much of the country’s capital wealth is concentrated in the hands of too few. Furthermore, Black Americans face greater systemic barriers to building wealth beyond the need for a decent wage. Employee ownership in companies could, and should, lower ...
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How Is Repurchase Liability Handled to Protect the Corporation?
In our video, learn more about repurchase liability arising from an ESOP and how repurchase liability is handled to protect the corporation.
Transcript
Repurchase liability, the obligation of the corporation to buy back the stock from departing participants, is a corporate finance ...
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How Is Fair Market Value of the Stock Determined?
If an ESOP stock is not publicly traded, a qualified independent appraiser is used to determine the fair market value. Watch our video to learn how the value is calculated.
Transcript
Both the Internal Revenue Code and ERISA require that the ESOP stock value be determined by way of ...
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Confused by the terminology? Check our Glossary of Terms