A fiduciary is anyone who makes decisions for the plan, causes someone to make a decision about the plan, or, in some cases, provides advice to someone making decisions about the plan. Put differently, it is anyone who exercises control over plan assets, directly or indirectly. Any person (or any group of people) can be…Read More
Anyone can serve as a trustee, but it should be someone with the requisite knowledge and skills or someone who will acquire them. While a seller can be a trustee, it is not a good idea as courts and the DOL will regard it as a per se conflict of interest. Who selects the trustee?…Read More
Can an independent trustee be designated for a particular issue? Yes. A reasonable compromise for many companies is to have an inside trustee or trust committee for normal operations but appoint an outside trustee for special circumstances that present strong conflicts of interest, such as an acquisition proposal. What are the arguments for having an…Read More
A trustee is the person or institution that normally has the formal responsibility to make sure the plan is operated for “the exclusive benefit of plan participants.” Trustees can be “independent” or “directed.” An independent trustee makes decisions for the plan based on the trustee’s judgment, relying as needed on advice from qualified professionals; a…Read More
Baby boomers have changed the face of the U.S. population for more than 70 years and continue to do so as more enter their senior years, a demographic shift often referred to as a “gray tsunami.” The 2020 Census will provide the most up-to-date count of the baby boom generation, now estimated at about 73…Read More
Aside from cost issues, what can make ESOPs not feasible? Several factors need to be considered: Is payroll adequate? As explained in the section “ESOP Participation, Allocation, and Vesting Rules and Practices,” there are limits to the dollar amounts that can be contributed to an ESOP each year (generally 25% of pay). If this amount…Read More
EXTERNAL TRUSTEES ARE EXPERTS. External trustees often have the experience and knowledge of all the issues that arise in connection with an ESOP. The Aegis team has over 65 years of ERISA experience making us uniquely qualified to fulfill the fiduciary obligations of trustee. Because Aegis’s only business is providing trustee services we have the…Read More
ESOPs Provide a Variety of Significant Tax Benefits for Companies and Their Owners. ESOP Rules Are Designed to Assure the Plans Benefit Employees Fairly and Broadly. Employee ownership can be accomplished in a variety of ways. Employees can buy stock directly, be given it as a bonus, receive stock options, or obtain stock through a…Read More
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