Cynthia Van Bogaert

Thanks so much for sharing your thoughts.

More resources for those who are interested: A paper, "Repeal Tax Incentives for ESOPs," :https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1517454. https://gaggle.email/attachments/ag1zfmdhZ2dsZS1tYWlscigLEgRMaXN0GICAiN_piNwIDAsSCkF0dGFjaG1lbnQYgICY_rrUuwkM/khawar_ali-headshot-NR-Scholar-1-300x275.jpeg The Perils and Promise of Employee Stock Ownership Plans (ESOPs) - Georgetown Center for Retirement Initiatives cri.georgetown.edu Problems with ESOPs pensionrights.org https://gaggle.email/attachments/ag1zfmdhZ2dsZS1tYWlscigLEgRMaXN0GICAiN_piNwIDAsSCkF0dGFjaG1lbnQYgICY_rrUuwsM/favicon.png Pros and Cons of Employee Stock Ownership Plans (ESOPs) investmentbank.com https://gaggle.email/attachments/ag1zfmdhZ2dsZS1tYWlscigLEgRMaXN0GICAiN_piNwIDAsSCkF0dGFjaG1lbnQYgICY_rrU-wgM/apple-icon.png

Dear Former Esq., The employee funding burden as well as shifted risk and increasing savings gap are problems we in the retirement field can help address. I encourage everyone to think about ways to raise awareness and enable solutions. The steps toward solutions might be varied: -consumer retirement literacy, including how to optimize savings on a low income that leaves little or nothing after rent/food; - employer plan design education, on design options that can assist lower paid employees; - government resources that provide more comprehensive, conflict-free information (not advice) on how to navigate retirement savings; - more broad regulatory and law changes. Those who assist employers can make them aware of plan design alternatives. Of course, the law still permits the "old" DB model as well as DC models that have robust employer contributions that can be allocated on a per capita basis (vs. per compensation). Employers that offer plans can offer plans without any age/service minimum to anyone in the controlled group. Employers that do not offer plans can be provided incentives to offer them. An important starting point is for all of the parties to understand the specific problems that lower- and moderate-income worker savings face. The GAO report on Older Workers:Retirement Account Disparities Have Increased by Income and Persisted by Race Over Time https://www.gao.gov/products/gao-23-105342 is a good resource. Here is an excerpt: "Disparities between low-income and high-income older workers' retirement accounts were greater in 2019 than in 2007, according to GAO's analysis of Survey of Consumer Finances (SCF) data on households 51 to 64. For example, about one in 10 low-income households had a retirement account balance in 2019 compared to about one in five in 2007, while about nine in 10 high-income households had a balance through the period. For those with a balance, the median balance was higher for high-income households over the period, while any change for the other income groups was not statistically significant. Racial disparities also persisted over the period. A higher share of White households had a balance than those of all other races. Also, White households had about double the median balance as households of all other races." If you are actively engaged with employers, you have a direct opportunity to help them improve the situation with plan design changes that provide more savings to more lower- and moderate-income workers. Thanks for your interest, Cindy

Update on TAP status and thank you for the TAP input. I had the privilege of joining the Taxpayer Advocacy Panel (TAP) as a volunteer this past June. The TAP mission has been to do direct outreach, gather grassroots taxpayer suggestions for customer service and administration, and collaborate closely with the IRS to implement real improvements. In addition to gathering helpful input through virtual outreach, it has been most meaningful to me to meet taxpayers in person, especially those who don't usually interact with the IRS. These meetings have provided chances to learn about their concerns and empower everyday taxpayers, such as a widow working to understand the family's taxes. It was also a chance for taxpayers to gain more understanding of the IRS. By watching them try live IRS.gov website searches, I was able to see what worked and what did not. One takeaway is that the IRS website search functions need help: Keyword Search Problems: Many struggled to find the exact, technical keywords required to deliver the information they sought. Substitute Information Sources (Sometimes Conflicted or Unreliable): Many people had never used the IRS website as a source for reliable, non-conflicted information about topics such as doing a Roth conversion or paying Required Minimum Distributions (RMDs). Instead, they relied on user-friendly AI and internet searches. Change is coming. We recently received notice from IRS Chief Executive Officer Frank Bisignano that the IRS is concluding TAP’s work in its current form as part of the IRS transition to a "digital-first agency." In his memo, he noted that this transition reflects a "commitment to meeting taxpayers where they increasingly interact with the IRS, with a greater focus on online and digital offerings." As the TAP program ends this year, I think we all should be grateful for the work TAP accomplished and the opportunity to advocate for everyday taxpayers. I also want to acknowledge the dedicated and effective IRS support staff who work tirelessly behind the scenes to keep TAP operating. I hope there are clear pathways forward for them within the agency's new structure. The IRS has indicated they will transition to a broader forum for public engagement soon. I'm eager to see how they continue to prioritize and empower direct public feedback in this next digital phase. And of course, I hope we all continue to provide our suggestions for improvements through comments and other proactive outreach to the agencies. Cindy

Hi Peter, I tried twice to submit your comment and ran into trouble with the website. Perhaps you could try to submit it yourself? You can be anonymous. It is a very short form. https://www.irs.gov/dmaf/form/f14388. Let me know if you also have trouble. Thanks, Cindy

Thanks for taking the time to provide more detail. I submitted this as an anonymous suggestion.

Dear QDROphile, Thanks for sharing. I appreciate you sharing your perspectives. I think it is important to look at the whole picture and for employers to be given all the pros and cons from a nonconflicted source when choosing a plan design, including the ways that plan design can make the plan more likely to provide a benefit to LMI workers when they are in retirement. In case it is helpful to anyone: Here are a Congressional Research Service and DOL report with some general issues: https://www.congress.gov/crs-product/IF13104 and https://beta.dol.gov/research-data/surveys-reports-publications/employee-ownership-initiative-report-congress Again, this is not tax or legal advice, is not on behalf of any other group or individual, and is only for informational purposes. Cindy

Dear Paul I., I think you make thoughtful points. I hope you keep engaging with ideas of plan designs that can help improve retirement savings for LMI workers. Thanks, Cindy

Dear ESOP Guy, Thanks for sharing this link and your thoughts. I think that every employer has an opportunity to think about how the company plan design is affecting LMI workers and to think about how their workers will fare in retirement. I have some older experience with ESOPs so my knowledge is not current, but perhaps some of these ideas can be adopted by more employers. Find ways that to encourage that ESOPs might be designed to: -have the broadest inclusion of employees: no hours or years of service or other exclusion to limit coverage; - provide for allocation based on fixed flat dollar amounts per person regardless of compensation; - provide a path upon termination of employment to another qualified plan covered by ERISA versus a lower-protection IRA; - avoid incorporating small account involuntary transfers to IRAs; - address diversification; - provide financial and retirement education. These are my thoughts and not necessarily those of others in the Retirement Reform Group. These are not tax or legal advice and are provided for informational purposes only. Thanks Cindy

Hello, I am writing this time as a member of the Retirement Reform Group, an informal, nonpartisan group of active and retired employee benefits attorneys working to address lagging savings for lower- and moderate-income workers. If you are interested in this issue (and I hope you are), our website is: retirementreform.org. Members of the Retirement Reform Group participating in the American College of Employee Benefits Counsel Annual Meeting Education Program in San Diego, CA (October 10, 2026) are pleased to share handouts prepared for the meeting. While the seminar itself is not open to the general public, the following materials are available on our webpage: - The Urgent Need and Incredible Opportunity to Expand Retirement Coverage through Efficient Plan Design (Richard Shea) - The Challenges and Promise of Lifetime Income in a Defined Contribution World (Norman Stein) - The IRA Protection Gap: Missing ERISA Safeguards, Rollover Vulnerabilities, and Paths to More and Safer Retirement Savings (Phyllis C. Borzi, Cynthia Van Bogaert) - Improving Access to Non-Conflicted Retirement Information for Individuals and Small Employers (Maria O'Brien, Mark Iwry/Matthew I. Whitehorn, Lisa Germano) -Why Aren’t They Saving? Real Plan Design and Demographic Barriers for Lower- and Moderate-Income Workers (Lisa M. Gomez) We invite policymakers, practitioners, and other stakeholders interested in improving lagging retirement savings for lower- and moderate-income workers to access these resources here: https://retirementreform.org/resources/ under the Presentations and Materials section. Again, I am not providing legal or tax advice. These are for informational purposes only. You may share them with others. Note that the Retirement Reform Group is limited to Fellows of the American College of Employee Benefits Counsel, but is not affiliated with the College. If you have ideas about problems and solutions you see in your practice, I would love to hear your thoughts. Cindy Van Bogaert Member, Retirement Reform Group

Hi ESOP Guy, It looks like you have 3 suggestions. I wonder if you have a website or publication, form, or instruction page in mind for the changes. If you do, please share those. a. The fiscal year question. Could you explain the situation further? Is your question about the CFO as an individual? Or, how to calculate the end of the preceding year balance? P. 25 of the Pub 590-B mentions fiscal year for those IRAs with UBTI, but I don't think that is what you are referencing. Maybe you are thinking of Pub 560? or a particular IRS page? https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds b. Your Q 1 is addressed here I think: https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans. P 12 of 2025 Pub 590-B says "More than one IRA. If you are the owner of more than one traditional IRA, you must determine a separate re- quired minimum distribution for each IRA. However, you can total these minimum amounts and take the total from any one or more of the IRAs. The same rule applies if you are a designated beneficiary of more than one IRA that was owned by a single decedent." See also p. 47. I think your suggestion is to explicitly note that this special rule does not apply to QPs. Great idea. c. Your Q 2: Same link has an example, but I think what you are asking is for these points to be emphasized by again explaining when taking an RMD, a rollover is not permitted. Another great idea (in my humble opinion). Again, I am not giving tax or legal advice or opining on whether any of the existing guidance is correct. But, I will submit your Q 1 and 2 as I understand them without identifying you. And you should feel free to clarify your fiscal year question or submit it directly to improveirs.org. Thanks, Cindy

Hi Peter and others who may be following, I just briefly looked at Pub 590-B. I searched for "reliance" in the pdf version and did not find it, but if you search on the html webpage ( https://www.irs.gov/publications/p590b), in the footer on the irs.gov site, there is a link to "Reliance on Guidance." https://www.irs.gov/newsroom/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs, which in part says: "... Informal guidance (forms, instructions, publications, IRS.gov webpages) Informal guidance like forms, instructions, publications and IRS.gov webpages is another valuable alternative to guidance published in the Bulletin. This informal guidance allows the IRS to more quickly provide administrative, educational, and procedural information to taxpayers needing information quickly, such as how and where to file returns, what to do if financial records are lost in a major disaster and other information about forms and instructions. Similar to FAQs, informal guidance does not apply the law to taxpayer-specific facts and may not reflect various special rules or exceptions that could apply in any particular case. Informal guidance has not been published in the Bulletin and will not be relied on, used, or cited as precedents by Service personnel in the disposition of cases. If information included in informal guidance turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability. Only guidance that is published in the Bulletin has precedential value. Notwithstanding the non-precedential nature of informal guidance like forms instructions, publications and IRS.gov webpages, a taxpayer's reasonable reliance on that informal guidance (even if the informal guidance is subsequently updated or modified) is relevant and will be considered in determining whether certain penalties apply. Taxpayers who show that they relied in good faith on informal guidance and that their reliance was reasonable based on all the facts and circumstances will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. See Treas. Reg. § 1.6664-4(b) for more information." I have submitted your original idea and am not commenting myself on whether this IRS link is adequate, updated, or correct, but thought I would point this out in case it is helpful to you. If you have specific ideas for revising this Reliance on Guidance piece, feel free to let me know or post yourself on improveirs.gov. Cindy (Note that I am retired and not providing tax or legal advice in any of my posts. I am just collecting ideas for TAP.)

Hi again Juan. To clarify, I will not be naming you as the source of this suggestion. You always can go to improveirs.gov to submit this or other ideas with or without identifying yourself. Thanks again, Cindy

Thanks Peter for this thoughtful and helpful reply. I will pass along your suggestion to TAP without identifying you.