Employee Stock Ownership Plans
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Inflation and ERISA Penalties: Hand in Hand for 2022

The Federal Civil Penalties Inflation Adjustment Act of 2015 directs the US Department of Labor (DOL) to make annual inflation adjustments to specified Employee Retirement Income Security Act (ERISA) violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2022, and if the violation occurred after November 2, 2015.

Access the updated DOL penalties.




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US Supreme Court to Review Unusual Second Circuit Decision in Stock Drop Case Against IBM

On Monday, the US Supreme Court agreed to review the Second Circuit’s decision in Jander v. Retirement Plans Committee of IBM, a “stock drop” lawsuit against IBM’s benefit plan fiduciaries. The Second Circuit’s decision marked one of the few times a federal court permitted a “stock drop” lawsuit to survive dismissal since the Supreme Court’s decisions in Fifth Third Bank v. Dudenhoeffer (2012) and Harris v. Amgen (2016). (more…)




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Staying Out of Trouble: How to Avoid IRS and DOL Audits

The Internal Revenue Service (IRS) and the Department of Labor (DOL) conduct different types of benefit plan audits, such as retirement plans and health and welfare plans, and for various reasons. In a presentation, Jeffrey Holdvogt and Maggie McTigue discuss IRS and DOL audit triggers, the process for each and what to do if your plan is audited. They also discuss the top audit issues and actionable steps companies can take to avoid audits and compliance issues.

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ESOP Trends in the Marketplace

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.

See presentation slides here.




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Advantages of Using ESOPs To Structure Acquisitions and Divestitures In An Uncertain Economy

M&A advisors are becoming increasingly familiar with leveraged ESOP transactions and are routinely considering the ESOP platform in structuring acquisitions and divestitures.  The first part of this article references the ways in which leveraged ESOPs have historically been used to provide a tax-advantaged exit strategy for privately held business owners. The article then discusses the advantages the leveraged ESOP structure can bring to M&A advisors and private equity groups charged with structuring acquisitions and divestitures during a down economy.

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