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Reasons to Establish an ESOP

  
  
  

Top 10 Reasons to Consider Employee Ownership shares ten reasons every business should consider establishing an ESOP:

  1. It improves the bottom line.
  2. It makes managing the business easier and more fun.
  3. It supplies the glue with which to build a business-oriented culture.
  4. It makes work more meaningful.
  5. It serves as a currency for attracting talent.
  6. It facilitates ownership succession in closely held businesses.
  7. It enables business owners to access the value of their equity without paying capital gains taxes.
  8. It affords access to a unique form of highly subsidized finance.
  9. It creates wealth in places it would not otherwise exist.
  10. From a national policy perspective, it fosters a more equitable and effective brand of capitalism.

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2012 IRS Pension Plan Limits

401(k) Deferral Limit - $17,000

Annual Additions Limit - $50,000

Maximum Compensation Limit - $250,000

Catch-Up Contribution Limit - $5,500

Highly Compensated Employee - $115,000

ESOP 5-Year Distribution Threshold - $1,015,000

ESOP Additional Year Threshold - $200,000

2012 Pension Plan Limits

1989 - 2012 Plan Limits