ESOP Consulting

We are ESOP consultants. The laws and regulations relating to ESOPs are very complex. The IRS and DOL target ESOPs for audits. Therefore, it is imperative that an ESOP Plan Sponsor work with a TPA who not only understands ESOP administration but has the foresight to see potential issues on the horizon so that they can be dealt with in a cost-effective manner. We take a team approach, working with your ERISA counsel, appraiser, and trustee to ensure the long-term viability of your ESOP.

When a client is considering implementing an ESOP or selling additional stock to an ESOP, proper planning is important. We provide ESOP feasibility studies to project the impact of the transaction on the cash flow of the company and the level of ESOP benefits to be provided to participants.

We consult with clients on plan design issues such as non-standardized allocation formulas, matching contributions made to an ESOP, rebalancing, targeted reshuffling and integration between the ESOP and 401(k) Plan. We can draft or work with your ERISA legal counsel to prepare an ESOP distribution policy.

We prepare both ESOP repurchase liability studies and more cost-efficient repurchase liability analysis reports for our clients depending on their needs. Our approach is not to just project the repurchase liability but to find solutions to manage the repurchase liability. These solutions may include releveraging the ESOP, pre-funding the ESOP, corporate sinking funds and corporate owned life insurance.

Preparing a 409(p) test is part of our ESOP administrative services. However, if a 409(p) test does not pass by a substantial amount, we are prepared to be proactive and discuss ways to avoid failing this test.