RSM McGladrey ESOP Blog

Off to Las Vegas!

2009-11-10T10:01:14-05:00

Here is the link to my latest column for the NCEO’s website - Distributions to Former Participants in Company Stock (Part 2)
I will be in Las Vegas for the rest of this week to attend the technical conference sponsored by The ESOP Association. I am anxious to try to get a read from the ESOP companies in attendance as to how they are feeling about the current economic situation. And I am anxious to get a read from my fellow practitioners as to whether transaction activity is starting to increase as noted in this piece - Creating Buyers: The ESOP as Exit Strategy.
I will report back here next week.

Survey on Corporate Governance in ESOP companies

2009-11-09T12:48:53-05:00

If you have not already done so, you may want to participate in this survey - NCEO’s 2009 Survey on Corporate Governance

I am confident that the results will be very informative.

Can an LLC establish an ESOP?

2009-11-05T10:28:32-05:00

I have been getting asked this question frequently so I thought I would address it here.

An LLC cannot sponsor an ESOP. The reason lies is the definition of qualified employer securities. Such definition requires that an ESOP be invested in stock issued by the employer. Ownership units in an LLC do not constitute stock.

Thus, an LLC would need to convert to either an S corporation or a C corporation to be able to implement an ESOP.

If you have a 401(k) plan, you may be interested in this webinar

2009-11-04T15:33:37-05:00

Register now for a live web presentation with Good Morning America's Mellody Hobson:.

RSM McGladrey’s Retirement Resources group will host a live Webinar at Noon, CST on Monday, Nov. 16, 2009 featuring Mellody Hobson.

Mellody is president of Ariel Investments, a Chicago-based money management firm that serves retirement plans and individual investors through its no-load mutual funds and manages separate accounts for institutional clients. Her professional and civic leadership have brought her to the forefront of media attention. In addition to her role on Good Morning America, Mellody has been a featured guest on ABC’s Nightline and World News Tonight.

Mellody will discuss important issues related to financial literacy and the state of retirement savings in America. During her presentation she will touch on:

· The need for financial literacy

· The state of retirement savings

· Ariel/Hewitt study results: 401(k) Plans in Living Color

· Helping employees achieve greater retirement savings

· Case studies & examples

This session is a must for all CEOs, CFOs, retirement plan advisors, and other industry professionals. Don't miss this great opportunity. Register today!

For questions about this program, please contact Sandra Clark at 815.231.7388.

Possible plan amendments needed before 12/31/09

2009-11-03T15:34:58-05:00

Tick, tock. Now that we have turned our clocks back and they have started to put up holiday decorations in my office building, the end of the year must be fast approaching.

I have included a link to a nice summary of the amendments that may yet need to be done to your ESOP and other retirement plans by 12/31/2009 or 1/31/2010. You may want to review this with your ESOP or other retirement plan advisor.

Does Your Qualified Plan Need to be Amended This Year?

IRS Mounts Major Payroll Tax Audit Initiative of 6,000 Companies

2009-10-30T13:20:04-04:00

Even though this is not directly related to your ESOP, I thought it was worth sharing - IRS Mounts Major Payroll Tax Audit Initiative of 6,000 Companies

Purchasing a Participant's ESOP Stock With a Promissory Note

2009-10-28T19:10:22-04:00

Some of my clients have been asking if they can make distributions from their ESOP in the form of company stock and pay the former participant over a period of years when such participant puts the stock to the employer. This piece is right on point with the answer (or lack of a definitive answer) to that question - Purchasing a Participant's ESOP Stock With a Promissory Note: Is Your "Adequate Security" Really Adequate?

Recent Headlines

2009-10-26T12:21:02-04:00

By now, you may have already seen this distressing headline - Influential Tax Journal Features Respected ERISA Expert Saying “Kill ESOPs”

It is clear that the ESOP community needs to continue to fund the type of research that can contradict these flawed opinions.

Thankfully, there was a much better deadline on the Foundation’s blog today - House Concurrent Resolution Expressing Continued Support for ESOPs Introduced

Finally, this last headline has nothing to do with ESOPs or employee ownership but I just had to share it anyway since it is my personal favorite from the weekend - ISU football: Cyclones pull off a stunner at Nebraska