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Allison Wilkerson focuses her practice on employee benefits matters. She has extensive experience handling issues pertaining to the Employee Retirement Income Security Act of 1974 (ERISA) and employee stock ownership plans (ESOPs). Read Allison Wilkerson's full bio.

ESOP transactions continue to grow in sophistication as sellers, plan sponsors and fiduciaries seek to meet certain goals and regulatory requirements. Allison Wilkerson, and other panelists for this presentation, reviewed a number of advanced transaction structures that are being utilized more and more to address specific needs identified by one or more of the parties involved in the arrangement. Such structures include the use of warrants in a financing structure, implementation of clawback and/or earn out requirements, use of incentive plans for successive management, and provisions that may be impactful with respect to future transaction or planning.

This presentation provides information to those companies/sellers/ESOP fiduciaries who are pursuing an ESOP transaction with alternatives that may provide an opportunity to better address the goals and objectives of the shareholders, ESOP, Company, employees and other stakeholders.

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Allison Wilkerson presented on a panel at the National Center for Employee Ownership (NCEO) Conference. The panel provided an overview of issues impacting compensation matters, as well as decisions affecting privately held companies that are wholly or partially owned by an ESOP.  The presentation included an analysis of certain legal requirements and a current view on best practices.  Finally, the panelists provided real-life examples of effective compensation programs and decision-making strategies for executive and staff compensation.

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The US Department of Labor has taken the position that certain indemnification clauses are void against public policy under Section 410 of ERISA. This policy has been adopted by private plaintiff classes; as evident from a recent settlement, a policy that voids indemnity provisions can limit defense budgets, make settlements more likely and potentially create dangerous precedent for ESOPs.

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Through a series of recent settlements, the US Department of Labor has outlined the process steps fiduciaries should follow in connection with a transaction involving a purchase from, or sale to, an employee stock ownership plan.

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Mary Samsa and Allison Wilkerson discussed that the majority of ERISA disclosures are in fact employee communications – many of which are viewed as “routine” by employers.  As such, plan sponsors are continually balancing the best way in which to relay complex benefit plan information in a manner to best be understood by employees but equally satisfy the applicable regimented disclosure requirements. Some key takeaways from their presentation included not only the compliance and content requirements, but methods for delivering communications to employees, traps for the unwary (i.e., inconsistent information communicated, the advantage of having these communications reviewed by legal counsel, and oversight of third parties who assist in preparing communications) and some common sense approaches for routine reviews of communications and continuing education to participants so that periodic communications are not always monumental tasks.

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Since the announcement by the Internal Revenue Service (IRS) that sponsors of individually designed retirement plans may no longer receive a periodic determination letter, plan sponsors have faced uncertainty about how to demonstrate compliance for their retirement plans. Our McDermott Retirement Plan Compliance Program, a new opinion letter and operational review program for individually designed 401(a) and 403(b) retirement plans, will allow plan sponsors to document their plans’ compliance with tax code requirements in response to the curtailment of the IRS’ determination letter program.

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The Internal Revenue Service and the Department of Labor relaxed some deadlines for eligible employee benefit plans and expanded the availability of withdrawals and loans for eligible defined contribution plan participants in the disaster area. However, the Pension Benefit Guaranty Corporation announced that some of its required filings will not be extended automatically.

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Andrew Liazos and Allison Wilkerson wrote this bylined article on Tax Code Section 409A’s deferral and payment requirements for nonqualified deferred com­pensation plans. Recent IRS Section 409A guidance makes “several helpful changes that employers will want to consider and take advantage of,” the authors wrote, and they warned employers that they ignore final IRS “at their peril…in light of the more limited ability to correct errors.”

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Originally published in The Practical Tax Lawyer, Spring 2017

Over the years, employee stock ownership plans (ESOP) have evolved in many ways. Currently, ESOP transactions began to resemble traditional M&A transactions including financial structures, warrants and market rate sub-debt. In a recent presentation at the NCEO Employee Ownership Conference, Allison Wilkerson discusses current marketplace trends in structuring ESOP transactions, including the importance of pre-transaction structure analysis and post-transaction planning. Allison also goes over the beneficial tax planning opportunities associated with ESOP transactions.

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