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ESOP trustees are people or organizations that are charged with managing the employee stock ownership plan on behalf of the plan participants. The Employee Retirement Income Security Act of 1974 (ERISA) requires all ESOPs to have a trustee to manage the plan assets. These trustees can be internal to the organization with the ESOP but…

ESOPs and 401ks can be valuable retirement security account options—both for employers and their teams. However, it can be tough to decide which account is best for your organization’s needs. So, let’s look at some of the differences between these two retirement vehicles so that you can decide which program best for your organization.  …

Ever since the establishment of the first ESOP in 1956, employee ownership has become a valuable tool for attracting and retaining top-tier talent that is loyal and vested in the success of the companies that hire them. In fact, many companies offer ESOPs in conjunction with a secondary retirement plan, such as a 401k. Offering retirement benefits such…

Limited liability companies (LLCs) are a relatively recent form of business organization, but one that has become increasingly popular because of their simplicity and flexibility. In contrast with corporations, which have shareholders, the owners of LLCs are called members, and the unit of ownership is not stock but “membership interests.” The maximum number of members…

Infographic by National Center for Employee Ownership (NCEO) from ESOPs in the U.S.

What GAO Found Fundamental changes over the past 40 years have led to various risks and challenges for the three main pillars of the U.S. retirement system. For example, current projections indicate that by 2034, the Old-Age and Survivors trust fund for Social Security’s retirement program—the first pillar—will only be sufficient to pay 77 percent…

It can, but given that virtually all 100% ESOPs are S corporations and pay no tax, there is no tax benefit to doing so. This may be a way, however, to get shares to new employees. Say a company wants to borrow money to buy a building (or any other asset). Shares would be allocated…

Can a leasing company (also called a Professional Employer Organization, or PEO) have an ESOP for its employees? A PEO employee working for a client organization (CO), known as a “worksite employee”, is often considered a common-law employee of the CO, as is the case for a worksite employee works full time at the CO,…

The trustee is the shareholder of record for corporate law purposes. As a fiduciary for these shares (or as directed by the entity or person acting as fiduciary), the trustee has all the rights any other shareholder would. These rights vary from state to state as corporate law is a state law issue. They include…

U.S. Government Accountability Office GAO-19-447R: Published: Jul 12, 2019. Publicly Released: Jul 12, 2019. What GAO Found Over the past 20 years, corporate restructurings, particularly mergers and acquisitions (M&A), tended to happen more frequently during periods of economic expansion. GAO’s analysis found that from 1999 through 2018, M&A activity comprised the largest share of corporate…