Category Archives: Employee Stock Ownership Plans

Subscribe to Employee Stock Ownership Plans RSS Feed

U.S. Supreme Court and Department of Labor Provide New Guidelines for ESOP Trustees

A recent court decisions and the Settlement Agreement in a Department of Labor (DOL) enforcement action against an institutional ESOP trustee provide new guidelines for trustees and other ESOP fiduciaries involved in the purchase or sale of company stock. Bear in mind that all employee stock ownership plans (ESOPs) are set up to invest primarily … Continue Reading

Does everyone want to be an owner?

In theory, employee ownership through an Employee Stock Ownership Plan (ESOP) is an almost perfect idea, since it benefits employees and businesses equally and simultaneously. Shares are allocated to, rather than purchased by, the employees, which puts ownership within the grasp of many who might never own a business otherwise. Employees have a strong incentive … Continue Reading

ERISA, take me back to 1982

I’m a big NBA fan, and I love those time traveling Kia commercials featuring Blake Griffin, the All Star forward of the Los Angeles Clippers.He’s in his Kia Optima and says, "Kia, take me back to 1992." There he meets himself and learns valuable life lessons. I can also imagine time traveling. Not with a … Continue Reading

IRS announces 2012 dollar limits on contributions and benefits

Each year the Internal Revenue Service announces the cost-of-living adjustments applicable to qualified retirement plans for the following year. Unlike 2001 in which most limits did not change from the prior year, most limits increased: Following are the key retirement plan limits announced yesterday by the IRS: The 401(k) and 403(b) limit for employee contributions … Continue Reading

Comparing and contrasting retirement plans for business owners

For a business owner choosing a retirement plan, it’s kinda like those compare and contrast essay questions on college exams. Except this time, it’s real life and a lot more complicated than the venn diagram pictured above. Fortunately, our friend Denise Appleby at her Appleby Retirement Dictionary has provided a handy and comprehensive chart comparing … Continue Reading

2010 retirement plan limits unchanged but have future implications

Most annual retirement plan limits are indexed to inflation; and because of the decline in the Cost of Living Index in 2009, many of the limits remained unchanged for 2010. Following are the key retirement plan limits for 2010 as announced by the Internal Revenue Service. 401(k) and 403(b) Deferrals: $16,500. Catch-Up Limit (Age 50 … Continue Reading

2009 Form 5500 not just about new disclosures – it’s also about electronic filing

Form 5500 isn’t just transforming disclosures as fellow blogger, Bob Toth, explained in his post 2009 Form 5500 Schedules A and C Will Create New Fiduciary Burdens For Plan Sponsors. The reporting road will be also be different. Beginning with the 2009 plan year, the Department of Labor (DOL) will require retirement and welfare plans … Continue Reading

Increase in bankruptcies calls attention to creditor protection aspects of retirement plans

Bankruptcy cases increased approximately 35% for the 12-month period ending June 30, 2009 , according to statistics released by the Administrative Office of the U.S. Courts. The number of cases went from 967,831 to 1,306,305. These statistics call attention to one of the often overlooked aspects of a retirement plan – protection from bankruptcy. It’s … Continue Reading

It’s Bond. Fidelity Bond … revisited

Whether your preference is Sean Connery, George Lazenby, Roger Moore, Timothy Dalton, Pierce Brosnan, or now Daniel Craig, the James Bond character has been used in the longest running and most financially successful English language film franchise to date. The Bond movies started in 1962 with Dr. No. For us ERISA people, our Bond originated … Continue Reading

“I asked you what time it was, not how to make a watch”

Every once in a while I’ll start to wander off into “Pensionspeak” when I’m talking to a client. And when I do, I’ll catch myself by remembering what one of our important business partners once told me when I started to get too technical. Or even technical at all depending on the audience. He told … Continue Reading

Independent contractor or employee? Employee classification still a high priority enforcement matter

Remember that kids’ game, Animal, Vegetable, or Mineral? You had to guess into what category the object fell. Well, today in business, there is a similar question. Independent contractor or employee? But it’s not a game. The misclassification of a worker can have serious financial consequences. Penalties and interest involving payroll taxes can pile up … Continue Reading

Two new ESOP blogs launched

The Tribune bankrupcy notwithstanding, ESOPs are doing very well in this country. Behind the headlines are the vast majority of sucessful ESOPs sponsored by closely-hald companies. You can follow what’s happening with ESOPs through two new blogs that have just come on-line. Employee Ownership Notes sponsored by The National Center for Employee Ownership Employee Ownership Blog sponsored by The Employee Ownership Foundation Hat Tip to Marc … Continue Reading

Parking spaces as a leading indicator of customer and client services

Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article that discusses one of the things it takes for business owners to be able to make retirement plan contributions. Check out Be A Park-Down-The-Street-Businessperson.… Continue Reading

December 2008 Client Briefing: FAQs on Fiduciary Liability Insurance

A Risk Management Tool for Fiduciaries in A New Retirement Plan Environment Updated for the Pension Protection Act of 2006 (PDF) Introduction My last post was a year-end ERISA fidelity bond reminder. ERISA does not require liability protection; the only mandatory insurance is an ERISA Fidelity bond to protect the plan assets from losses due to misuse or … Continue Reading

ESOP as an Exit Strategy: Presentation to Chicago Bar Association Financial Institution Committee

See full-size image. Exit strategies for business owners – particularly the baby boomers – is a matter to which they are giving increased attention. And so are their attorneys. Yesterday I participated in a continuing education program sponsored by the Financial Insitution Committee of the Chicago Bar Association for its members on this topic. Our particular focus was ESOP … Continue Reading

Indiana basketball season over, “ESOP Season” begins

Indiana State Treasurer Richard Mourdock announced last Thursday a new state program to encourage the formation of Employee Stock Ownership Plans (ESOPs) in the state. The new program, called Indiana’s ESOP Initiative (ICI), will invest up to $50 million in state money in Indiana banks that specifically lower their interest rates in loans made to … Continue Reading

“Should I stay or should I go?” The factors influencing an employee’s decision to retire

It was 1982, and many of today’s baby boomers were listening to the song, “Should I Stay or Should I Go” that was on The Clash’s album, Combat Rock. According to NME, Mick Jones, the lead guitar on the song, wrote it about singer Ellen Foley, who sang the backing vocals on Meatloaf’s Bat Out … Continue Reading

“Bad boy” clauses aren’t passe after all – but sometimes it takes a judge to do the right thing

Back in the day – before ERISA – retirement plans had ‘bad boy" clauses. These were plan provisions under which a participant would forfeit his vested account balance if the participant was a "bad boy" for such actions as violating a non-compete clause or committing a criminal act. But ERISA did away with "bad boy" … Continue Reading

Enough already about the Baby Boomers, what about Generation X?

View larger image. Lost in the mass media focus on the Baby Boomers retiring is Generation X, the generation that follows. Depending on how they are defined, it’s the people born between 1965 and 1985 (age 23 to 43). I’ve written about them before, Not my generation that nobody seems to want. The "nobody" referred … Continue Reading

What every fiduciary should know about their brokers … and also their custodial banks, and financial contracts

I’ve got that queasy feeling again in my stomach. The recent collapse of Bear Stearns gave me flashbacks to the 1990s during which we struggled with insolvency issues affecting ERISA plans. If you were around back then, you’ll remember the insurance companies that failed or were seized by insurance regulators as a result of failed … Continue Reading
LexBlog