Blue Ridge ESOP Associates Industry News

Three Reasons We Should be Thankful for 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.

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2015 Limits announced by the IRS and SSA

Posted by Tom Roback, Jr.

Nov 2, 2014 11:50:05 AM

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.

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10 Facts You Should Know Regarding ERISA Fidelity Bonds

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.

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Topics: ERISA

IRS Releases New Technical Advice Memo on ESOP Loan Error

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.

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Topics: Government & ESOPs, ESOP Administration

BREA Professionals at Upcoming Technical Presentations

Posted by Laura Sadikoglu

Aug 15, 2014 3:54:46 PM

Upcoming Technical Presentations 
 
13th Annual Tri-State ESOP Conference - Louisville, KY 
Ohio/Kentucky and Indiana Chapters of The ESOP Association
August 27, 2014 
"ESOP Administration Basics"

Dolores Lawrence, CPA, QKA  

 

15th Annual Fall ESOP Conference - Overland Park, KS

Heart of America Chapter of The ESOP Association 

September 4, 2014 

"ESOP Trends"


ESOP Midwest Conference - Oak Brook, IL
IL/IA/NE/MN/Dakotas/WI Chapters of The ESOP Association
September 11-12, 2014
"Basic ESOP Distribution Rules" 

 

Fall Conference - Nashville, TN 

New South Chapter of The ESOP Association

September 17-18, 2014

"Equity Compensation Basics for Private Companies"

Tom Roback, CEP, QKA

 

19th Annual Multi-State ESOP Conference - Scranton, PA
PA/DE & NY/NJ Chapters of The ESOP Association
September 17-18, 2014
"The Annual Update Process - From Stock Price Determination to Participant Statements"  
 Barbara Clough, QPA, QKA
 
Annual Fall Conference - Mystic, CT
New England Chapter of THE ESOP Association

October 2-3, 2014
"Managing Repurchase Obligation"

The S Corporation ESOP Seminar - Philadelphia, PA

NCEO   

October 7-8, 2014
"What You Need to Know about the 409(p) Anti-Abuse Regulations"

Dolores Lawrence, CPA, QKA

    

2014 California/Western States Chapter Conference - Disneyland/Anaheim, CA

California/Western States Chapter of The ESOP Association

October 8-10, 2014

"Basic ESOP Administration"

Randy Shrake, QKA

 

2014 Annual Conference - Honolulu, HI
Hawaii Chapter of The ESOP Association
October 9, 2014
"The Four 'Rs' - Rebalancing, Reshuffling, Recycling and Redemption"

Barbara Clough, QPA, QKA  


Annual Fall Conference - Charlottesville, VA
Mid-Atlantic Chapter of The ESOP Association
October 17, 2014
"Distribution, Diversification, and Segregation Challenges" 
 
ASPPA Annual Conference 2014 - National Harbor, MD
October 26-29, 2014  

"Identifying ESOP Opportunities"

Tom Roback, CEP, QKA

 

2014 Las Vegas Conference and Trade Show - Las Vegas, NV
The ESOP Association
November 13-14, 2014

"401(k)/ESOP Integration Issues"
Friday, 10:30 a.m.

"We are not that Young Anymore - Issues of Mature ESOPs"  
Friday, 10:30 a.m.

"When Bad Things Happen to Good Participants"
Friday, 2:00 p.m. 

 

NCEO Webinar  

November 25, 2014
"ESOP Distribution Policies"

 

 
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ESOP & 401(k) Coordination Tips Post-Disclosure-Part 2

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.

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Topics: ESOP & 401(k) Plans

ESOP & 401(k) Coordination Tips Post-Disclosure-Part 1

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?

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Topics: ESOP & 401(k) Plans, ERISA

Implications of a Supreme Court ESOP Ruling

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.

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Topics: Government & ESOPs

401(k) Pre-approved Plans – It’s Restatement Time

Posted by Dolores P. Lawrence, CPA, QKA

Jul 3, 2014 4:25:55 PM

401k_roadsignIf 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.

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Topics: Plan Design

IRS - DOL Corner

Posted by Dolores P. Lawrence, CPA, QKA

Jul 3, 2014 4:11:00 PM

The IRS continues its series of focused, limited scope audits. Audit initiatives include looking at:
  • Nonqualified deferred compensation plans. IRS is considering operational and plan document compliance, including compliance with IRC Section 409A. Their examinations will focus on elections to defer the receipt of compensation, plan distributions and funding restrictions.
  • Defaulted participant loans. There is a concern that loans are not being repaid in a timely manner and that some loans are not be getting taxed as “deemed distributions” when a loan goes into default. Generally, a loan goes into default no later than the end of the calendar quarter which follows the quarter in which a payment was missed. On default, the entire loan is taxed as deemed distribution, not just the payments in arrears.
  • For 401(k) plans, ADP/ACP tests that have not been run correctly or situations in which failed test corrections are not made timely.
  • Plans with Roth provisions. There is a concern about deferral and distribution errors due to the complexities of administering Roth provisions.
  • Small employers with multiple plans!   IRS has a concern that there could be a greater risk of error in administering multiple plans. For example, if a company sponsors an ESOP and a 401(k) plan with different definitions of compensation, are there errors in the compensation data provided to third party administrators?
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Topics: Government & ESOPs

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