Blue Ridge ESOP Associates Industry News

The Certificate Program for
Non-Professional ESOP Fiduciaries
February 22-25, 2015 San Diego, CA

Hosted by The Beyster Institute at UC San Diego

Program Overview
You are invited to participate in our third annual Certificate Program for Non-Professional ESOP Fiduciaries – to be held at the Rady School of Management, UCSD, Feb., 22-25, 2015.

One of the fundamental resources of the employee stock ownership plan (ESOP) movement is the large group of dedicated, well-intentioned people who agree to serve as trustees or other fiduciaries on behalf of their company’s ESOP. If you are one of those dedicated people, you have undoubtedly felt the concern that is inevitable when taking on that sort of responsibility. The Beyster Institute at UCSD has developed a special intensive education program to help relieve some of that concern - the Certificate Program for Non-Professional ESOP Fiduciaries.

In the spirit of Thanksgiving, I thought of three reasons we should be thankful for Employee Stock Ownership Plan (ESOP) companies.

On October 22, the Social Security administration announced the cost-of-living adjustment for 2014. The IRS announced on October 23, the new cost-of-living adjustments which impacts 2015 pension plan limitations. Please read more about the SSA announcement here and the IRS announcement here.

Read the first section of this article here regarding ESOP & 401(k) Coordination Tips Post-Disclosure.

After several postponements, 401(k) fee disclosure was mandated by the DOL (Department of Labor) before July 1st of 2012. So what kind of impact have we seen in the ESOP world? Has it been successful in helping plan sponsors and participants understand the costs of their 401(k) Plans?

Employee Stock Ownership Plans (ESOPs) seem to be generating more interest from business owners lately. While ESOPs have similarities to 401(k) plans, there are big differences. ESOPs have the unique right to borrow and own up to 100% of the company's common stock. ESOP assets are held in a tax-exempt trust and employees do not contribute anything personally.

Congratulations to The ESOP Association, ESCA and all of the active ESOP companies who have been telling their successful ESOP stories to our elected officials. Dave Camp, the Chairman of the House Ways & Means Committee, released his tax reform proposal and he basically left ESOPs alone. Camp's tenure as Chair ends this year, but he is eager to leave a legacy. His propsal offers a rate cut for C Corporations to 25% phased in over 5 years, a 10% surtax for high income tax filers, simplification of individual rates to a 10% or 25% bracket, and curbing tax "expenditures" like the mortgage interest deduction. The only notable provision that directly affects ESOPs in this discussion draft is that companies who are less than 100% ESOP-owned S Corp.s could pay at a higher tax rate then comparable C Corporation ESOPs.