In the spirit of Thanksgiving, I thought of three reasons we should be thankful for Employee Stock Ownership Plan (ESOP) companies.
Posted by Tom Roback, Jr.
Nov 24, 2014 5:19:49 PM
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.
Posted by Kevin T. Rusch, CPA, QPA
Oct 27, 2014 10:54:23 AM
The Employee Retirement Income Security Act of 1974 (ERISA) requires that every fiduciary of an employee benefit plan and every person who handles funds of the plan be bonded. The purpose of the bonding requirements is to protect employee benefit plans from risk of loss due to fraud or dishonesty on the part of persons who ”handle” the plan assets. To monitor this requirement, plan sponsors are required to report annually on the IRS Form 5500 whether the retirement plan, including ESOPs, was covered by a fidelity bond and the amount of coverage for that respective plan.
While there are no specific penalties for failure to satisfy the appropriate bonding requirements, this is one step not to overlook. Plan fiduciaries can be held personally liable for any losses incurred by the plan that should have been covered by a fidelity bond. In addition, U.S. Department of Labor (DOL) investigators routinely review ERISA fidelity bonds during plan audits and investigations.
Topics: ERISA
Posted by Jacob B. Nadkarni
Oct 27, 2014 10:46:38 AM
This past June, the IRS released Technical Advice Memorandum (TAM) 201425019, which addressed the tax consequences of an ESOP failing to use the proper method of calculating the annual release of company stock from the loan suspense account.
Topics: Government & ESOPs, ESOP Administration
Posted by Laura Sadikoglu
Aug 15, 2014 3:54:46 PM
15th Annual Fall ESOP Conference - Overland Park, KS
Heart of America Chapter of The ESOP Association
September 4, 2014
"ESOP Trends"
Fall Conference - Nashville, TN
New South Chapter of The ESOP Association
September 17-18, 2014
"Equity Compensation Basics for Private Companies"
NCEO
October 7-8, 2014
"What You Need to Know about the 409(p) Anti-Abuse Regulations"
California/Western States Chapter of The ESOP Association
October 8-10, 2014
"Basic ESOP Administration"
"Identifying ESOP Opportunities"
NCEO Webinar
Posted by Tom Roback, Jr.
Jul 31, 2014 9:08:00 AM
Read the first section of this article here regarding ESOP & 401(k) Coordination Tips Post-Disclosure.
Topics: ESOP & 401(k) Plans
Posted by Tom Roback, Jr.
Jul 31, 2014 8:00:00 AM
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?
Topics: ESOP & 401(k) Plans, ERISA
Posted by Dolores P. Lawrence, CPA, QKA
Jul 9, 2014 3:57:49 PM
Background. When a company’s retirement plan includes employer stock as an investment option and stock value declines significantly, plan participants may seek to recover losses. In the past decade, there have been many “stock drop” lawsuits and most have involved public companies that sponsor KSOPs or other plans holding employer stock. Claimants have alleged that plan fiduciaries failed to liquidate employer stock or failed to restrict further purchases when such investments became imprudent. Defendants have responded by citing The Moench Presumption as part of their defense.
In the 1995 ESOP case Moench v. Robertson, public company stock declined sharply before the company went bankrupt. ESOP fiduciaries continued to invest in company stock while the share price dropped from $18.25 to $.25 over a two-year period. The Third Circuit court ruled that ESOPs are designed to be invested in employer stock and there is a “presumption of prudence” for holding employer stock in an ESOP. A plaintiff can overcome the presumption by establishing that a fiduciary abused its discretion by investing in employer stock.
Topics: Government & ESOPs
Posted by Dolores P. Lawrence, CPA, QKA
Jul 3, 2014 4:25:55 PM
If you are a sponsor of a 401(k) or profit sharing plan, it is likely that your plan documents are in the “pre-approved” category (prototype plan document or volume submitter). Such plans are subject to six-year restatement cycles. The next restatement cycle, referred to as the PPA Restatement period, opened May 1, 2014.
A restatement is a complete re-writing of your plan document to incorporate changes in laws that have occurred since the end of the prior cycle. This includes the Pension Protection Act (PPA), the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART) as well as other changes.
Topics: Plan Design
Topics: Government & ESOPs
Blue Ridge ESOP Associates can provide everything you need to administer your ESOP, 401(k) or combination ESOP/401(k) plan. Our full service outsourcing, which can include participant on-line services, provides worry-free assistance for your HR or Benefits staff, leaving them free to concentrate on other responsibilities.
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