Blue Ridge ESOP Associates Industry News

My ESOP third party administrator (TPA) is asking me to “please verify whether you have synthetic equity and any new family groups.” Why are they asking?

Turnover is inevitable and in some cases, employees are rehired. How do you treat rehired employees? Will the employee automatically participate in the plan? Will their vesting remain the same? What happens if the employee is in payout status? In this article we will look at eligibility, breaks in service, vesting, and other things to keep in mind so when an employee is rehired, you will be able to confidently explain what that means for their account.

On November 2, 2023, the IRS announced cost of living adjustments affecting qualified retirement plans for 2024.

There are many options to consider when determining the best way to handle an ESOP plan’s
repurchase obligation.

Your annual ESOP statement gives you a terrific opportunity to make the most of employee ownership. Seize it by implementing these seven practical suggestions to increase understanding of your ESOP, strengthen your company’s culture, and promote employee ownership as a powerful tool for improved performance and employee retention.

Each ESOP is unique and must consider their own company goals when deciding the appropriate benefit levels. There should be an ongoing balance between the company cash flow and participant benefit levels. The goal is to maximize the expected return for the participant, however, to do so the ESOP program must be sustainable and not hinder the growth of the company. A consideration especially as an ESOP matures is determining the appropriate benefit level. Consistent benefit levels can help with a sustainable repurchase process and set expectations for the plan participants. Benefit levels are measured based on the contributions and the fair market value.

The fair market value of employer stock is determined by an independent valuation firm; however, the fiduciary is ultimately responsible for making sure the stock has been properly valued. Over or under valued stock can lead to deduction issues, a prohibited transaction, or other violations. Fiduciaries must act prudently and in good faith with the fair market value calculated with adequate consideration to prevent such issues.

Florida Chapter 2023 - Conference and Roundtables

August 31, 2023 - Orlando, FL

Carla Klingler - Regional Sales Director, Southeast

Sustainability – Strategy Choices and How They Affect Participant Accounts

Blue Ridge is proud to be a contributing sponsor for the OH/KY Chapter - 2022 Thoroughbred Conference on July 25, 2023 hosted by The ESOP Association for the OH/KY Chapter. Our professionals, Pete Shuler and Jim Bado will be presenting  Really Understanding the ESOP Distribution Process. Bring your distribution questions to this practical session. They'll cover the rules and regulations regarding distributions at retirement, disability, death and for any other reason. Their goal:  help you build a real-world understanding of the distribution process while avoiding any mention of code sections (sorry no guarantees). To strengthen your knowledge, we'll also discuss diversification, in-service, and thrilling acronyms like QDRO and RMD.