Dividends Versus Distributions In ESOP Planning | Abstract
C corporations issue dividends. S corporations issue distributions. What's the difference? In ESOP planning, you might find that S corporation distributions mean the difference between being able to finance an ESOP transaction or not. In a C corporation, you can use dividends to avoid double taxation on at least part of the company's income. This article is an in-depth review of the uses, and limits, on dividends and distributions in an ESOP company.
The U.S. Department Of Labor And Certain Recurring ESOP Violations: If They've Seen It Once, They've Seen It … A Lot! | Abstract
A few common ERISA violations come up repeatedly in DOL investigations of ESOPs – typically related to the ESOP transaction. In this brief article, you'll learn what those common errors are and how you can avoid or correct them.
ESOP Refinancing: Fiduciary Duties | Abstract
At some points in the life of the ESOP loan, you may find it advantageous or necessary to refinance that debt. This article examines the factors fiduciaries should consider, including the benefit of the refinance to the company versus the benefit to the ESOP participants; the impact on current participants versus future participants; and whether the ESOP should be compensated for agreeing to the refinance.
ESOP Diversification Myths and Misunderstandings | Abstract
Diversification – that often misunderstood process by which "qualified participants" can elect to have some of the shares in their ESOP account distributed to them in cash or rolled over to other investment options. Read this article for a basic overview of which participants have diversification rights, the choices available to participants, and the timing of the diversification notice, election and execution.
ESOP Refinancing: Fiduciary Duties
ESOP transactions using loans to purchase stock are complex, typically well thought out at the outset, based on the negotiated terms of the deal, the company's finances, the demographics of the ESOP participant census and the projections of repurchase liability. However, because any of these variables can change over time, ESOP loans can be refinanced. But a refinancing, no matter what the reason, must be agreed to between the ESOP trustee and the lenders and guarantors (if any) of the ESOP debt, which may include the selling shareholder, the company or a bank. This article identifies the seldom discussed yet appropriate factors under ERISA and trust law for fiduciaries to consider when refinancing an ESOP.
Professionals can 'Cash In' with Cash Balance Plans
This article explains the unique characteristics of a cash balance pension plan and its suitability for use by professional groups where the owner-professionals are already maxing out their contributions under a defined contribution plan.
ESOP Share Distributions: "Recycle" Or Redeem? | Abstract
You have choices when it comes to distributing ESOP benefits to participants. Do you distribute shares from the plan that the company immediately redeems from the participant? Or, do you keep the shares in the plan by recycling them among the remaining accounts and distribute cash? This article gives you the tools to make that decision. Learn how each distribution method impacts your company's tax planning and share value as well as the impact on the ESOP participants. You'll even learn how you can combine recycling and redemption with other tools to target benefits to senior employees or newer employees.
ESOP Companies: Should You Elect S Corporation Status? | Abstract
Here's the analysis you need to figure out whether electing S corporation status makes sense for your ESOP company. We look at built-in gain, LIFO/FIFO, tax attributes and more. You'll still want to talk to your CPA, but this article will give you what you need so you can ask the right questions.
ESOP Distributions: Problems to Avoid | Abstract
We understand. Designing and administering ESOP distributions can be a confusing array of choices. Where do you start? Right here. This article gives you the information you need to understand the available distribution options when you're designing your ESOP and pitfalls to avoid when it comes time to issue distribution election notices. For participants, these are high stakes moments, and you need to get it right.