Updated February 8, 2021
Unlike the typical 401(k) plan, ESOPs aren't an "off-the-shelf" retirement plan.
Until recently, each ESOP plan had to be individually designed to serve a specific set of purposes. The IRS recently allowed ESOP plan documents to be more like a 401(k) plan – with ...
[Read more] about How An ESOP Program Is Put Together – Some Assembly Required
ESOP Plan Design And Document Drafting
Updated August 2020
If we're drafting your ESOP plan document, then you'll become familiar with our ESOP Plan Design Checklist. That checklist is what jump-starts our conversation with you about how your ESOP should be designed. This article tells you why we're asking the questions we ask on the ...
[Read more] about ESOP Plan Design And Document Drafting
When To Choose An ESOP Succession Plan Over A Conventional Exit Strategy
An ESOP succession plan offers a number of advantages to sellers, companies and employees that no conventional exit strategy can match. However, those unique advantages are only worthwhile for those who find the very nature of ESOPs worthwhile. On the other hand, pure exit strategies (such as ...
[Read more] about When To Choose An ESOP Succession Plan Over A Conventional Exit Strategy
ESOP Suitability: How Much Revenue Must A Company Have To Be Big Enough?
For ESOP suitability purposes, we look at three measures of revenue:
Earnings before interest, taxes, depreciation, and amortization (EBITDA);Free cash flow; and,Taxes paid.
EBITDA
EBITDA is usually the most significant measure appraisers use to determine the value of the company. The ...
[Read more] about ESOP Suitability: How Much Revenue Must A Company Have To Be Big Enough?
ERISA Reporting And Disclosure Requirements: Eight Common Mistakes To Avoid
One: Failure to file notice of a blackout period.
ERISA reporting and disclosure requirements can be daunting. Retirement plans must provide a notice to plan participants if the participants' ability to direct their investments in the will be limited for three or more business days. The plan's ...
[Read more] about ERISA Reporting And Disclosure Requirements: Eight Common Mistakes To Avoid
It’s Alive – Posthumous QDROs
A small item in the Pension Protection Act of 2006 (PPA) revived the viability of qualified domestic relations orders (QDROs) entered after the death of a participant. This should concern family law attorneys, employers, plan administrators and TPAs.
Over the years a series of cases have held, ...
[Read more] about It’s Alive – Posthumous QDROs
Automatic Enrollment – Time To Plan & Act
Saving for retirement is an important issue facing employers and employees alike. With Social Security's long-term viability in question, employees must be actively involved in creating their own retirement nest egg. One of the best ways an employee can save for retirement is through pre-tax ...
[Read more] about Automatic Enrollment – Time To Plan & Act
Form 5500: The Role Of The Accountant And The Audit Report
What is an accountant's role in your annual return/report (Form 5500)? Conventional wisdom says that accountants or auditors have an integral role to play in the preparation of the annual report for employee benefit plans, from both a financial and a regulatory standpoint. However, the scope of ...
[Read more] about Form 5500: The Role Of The Accountant And The Audit Report
Third Party Administrator Agreements: What To Include
Once you've gone through all the trouble and expense of figuring out what types of retirement plan administration services you require and the specific type of TPA that will best meet those needs, you need to have a clear and comprehensive written services agreement with whichever TPA you retain to ...
[Read more] about Third Party Administrator Agreements: What To Include