ESOP

Services for ESOPs Feasibility Studies and Analysis The Rogers Companies will analyze the impact an ESOP will have on your company, your shareholders and your employees.  We will meet with your board of directors, attorney, and CPA to discuss options.     Installation The Rogers Companies works closely with an attorney who specializes in ESOPs to ensure the plan is designed to fit your company.  This includes the Plan Document, Trust Document, Summary Plan Description and Corporate Resolutions.  Services include all documents necessary to file for the required Favorable Determination Letter from the Internal Revenue Service.     Communication and Education The Rogers Companies recommend and encourage regular scheduled meetings with employees.  Power-point presentations are used to help clarify their new owner-employee status.  Summary Plan Descriptions will be fully explained along with an open question and answer period.  Special emphasis is given to supervisors and middle managers to clearly define their roles in the change in organizational operations.     Existing Plans Existing plans will need to be analyzed and possibly modified before installing the ESOP.     Administration  Rogers & Associates provides services to our clients to ensure that the plan is operated in compliance with all current Department of Labor (DOL), Internal Revenue Service (IRS) and other governmental agency’s regulations and codes applicable to the area of qualified retirement plans.      These services include but are not limited to: Employee data collection Valuation booklet complete with: Plan Specifications Employee Census Trustee Report Account Balances Compliance Testing IRS Form 5500 with all required reporting schedules and attachments Monitoring plans for compliance with current laws Preparation of terminated participant’s distribution paperwork IRS forms 945 and 1099-R prepared for each distribution Individual Participant Statements   Services above are performed by Certified Pension Consultants (CPC), Qualified Pension Administrators (QPA) and Qualified 401(k) Administrators (QKA).     Liability Study a repurchase liability study is used to predict the obligations that the company could incur over different periods of time.  Most employees on exiting from the company will expect to have the stock in their account converted to cash.  Through proper planning, the funds will be available for these distributions.

ESOPs Defined An ESOP is a special qualified retirement plan.  An ESOP will provide a market for company stock in addition to providing retirement benefits for your employees.  It can also be used to provide estate planning for the owner of a closely held corporation.   The employer’s contribution of company stock instead of cash helps provide the means for company growth through a deductible contribution while retaining cash in the company.   An owner of a closely held company can sell shares to the ESOP.  If the stock sale is at least equal to 30% of the outstanding shares, the owner can elect to use an Internal Revenue Code Section 1042 “tax-free” rollover transaction to defer the recognition of the gain on the sale.  If the seller uses the 1042 election, the proceeds of the sale must be reinvested in qualified replacement property within twelve months of the sale.   Qualified replacement property is securities of either a domestic public or private company.  Mutual funds and government securities are excluded.   Employers who sponsor an ESOP and another type of qualified plan must also maintain a separate plan document, and separate summary plan descriptions, as well as prepare separate plan valuations and government reports.