ERISA §101(a) requires the plan administrator to furnish the Summary Plan Description (SPD) to each participant covered under the plan and to each beneficiary who is receiving benefits under the plan.  The SPD informs participants of the material provisions of the plan, how to make a claim for benefits, and what their rights are under ERISA.

When working with business owners that are considering Selling to an ESOP, one of the beginning steps is to obtain a preliminary value.  A preliminary value is an important piece of the decision-making process for the various stakeholders involved in the process and becomes a foundation of the ESOP feasibility analysis. 

Employee Stock Ownership Plans (ESOPs) and other qualified retirement plans enjoy a preferential tax status with the IRS.  In order to qualify for this special tax treatment a plan must comply with the many compliance requirements of IRC Section 401(a) - Qualified pension, profit-sharing, and stock bonus plans.  One of the ramifications of not remaining in compliance is plan disqualification.  Employee Plans News - Issue Number: 2012-1 – March 20, 2012 shares the Tax Consequences of Plan Disqualification to employees, the employer, and the plan’s trust:

Title I of the Employee Retirement Income Security Act (ERISA) requires retirement plans, including ESOPs, be audited each year by an independent qualified public accountant (IQPA) as part of the plan’s annual report (Form 5500). 

It won’t be long and April 1^st will already be upon us.  One requirement for ESOPs and other qualified retirements plans is to distribute Required Minimum Distributions (RMDs) to eligible plan participants.

Yesterday we shared the latest timing update that the revised DOL ESOP Fiduciary Regulations will be available in July 2012 (or later).  The Department of Labor Wants to Redefine “Fiduciary” to Include ESOP Appraisers. Why? discusses how the DOL has still not provided a meaningful analysis of the improper ESOP stock appraisals they cite nor quantified the extent of the problem.  The article provides an overview and analysis of the proposed regulations, discusses valuation industry recommendations, and provides an update on the status of the revised proposed regulations:

U.S. Labor Department to release fiduciary rule by July provides an update on the timing of the DOL Re-Proposal of the DOL Regulation to Change the Definition of ESOP Fiduciary. 

We have been discussing how ESOPs and employee ownership + participative management = Improved Corporate Performance.  One way to get employees to more actively participate in the direction of the company is with open-book management.  What Your Employees Don't Know Will Hurt You:  And that includes a company's financial results is a great article on the subject:

Have you distributed your preliminary ESOP Diversification forms yet?