Blue Ridge ESOP Associates Industry News

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.

Blue Ridge ESOP Associates' professionals will be attending the Wisconsin Chapter Summer Meeting this Thursday at Lambeau Field.

Please note the following article is directly from The ESOP Association which was posted May 19, 2023.

REDEEMING

The Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) contained provisions aimed at increasing access to tax-advantaged accounts and changes to required minimum distribution rules.   The budget bill signed by President Biden on December 23, 2022 included the SECURE 2.0 Act of 2022 (“SECURE 2.0”). SECURE 2.0 builds on the SECURE Act with changes aimed to strengthen the retirement system and financial preparedness upon retirement.