Federal Law Requires All Benefits Plans To Have a Trustee
Under ERISA, an ESOP is defined as a trust that borrows to fund the purchase of company stock from the divesting owner and its distribution to employees as a defined-contribution workplace ownership and retirement benefit. The appeal of the ESOP is tied to the generous tax benefits that cover both sale of stock and employee contributions.
The fund is required to be run by a trustee who is under guidelines just as strict, if not stricter, than the fiduciaries of most other benefit plans. An ESOP trustee is:
- Bound by the “exclusive interest” rule, i.e. must act only in the interest of plan members;
- Bound by the “prudent man” rule and required to avoid risky investments;
- Charged to hire an independent valuation advisor for stock valuations;
- Responsible for setting stock price, making sure initial & annual stock valuations are done correctly;
- Personally liable for mismanagement or losses in the ESOP;
Our ESOP trustees are experienced and great at communication.
ESOPs are……a flexible business tool that can help you transition ownership while keeping down costs, pleasing your employees, and freeing up future cash flow so your company can keep growing. |
Start & Grow ESOPsForward planning is a hallmark of a smart business owner, and this planning includes consulting an expert ESOP advisor on the benefits of implementing an ESOP or conducting a feasibility study. |
On ESOPMarketplace.com, you will find not only ESOP trustees with decades of experience in ESOP administration, regulatory compliance, fiduciary liability and more. Our site also makes it easy to find attorneys, accountants, financial advisors, insurance agents and other experts. All of these specialists have helped many companies through the potentially difficult transition to an ESOP, and have steered the plans post-transition with a steady hand and clear vision.
Picking a trustee who knows how to manage an ESOP and communicate with all the people involved in advising, managing or contributing to the plan is crucial to its effectiveness. With ESOP Marketplace, you can always be certain that you’re getting the best of the best.
