ESOP Guy

You're just muddying the water unnecessarily. Even you admit that all the plan has to do is distribute the shares if the company wants to buy them. Or more likely the original commentor is using nontechnical language for a very technical event. Since he mentioned the putting the money into a money market more likely the company isn't actually buying the shares but recycling them within the ESOP. To most people in the ESOP and not in the industry the ESOP and company are basically interchangeable when legally they are very different. This company would have to have the most incompetent advisors to have the company buying these shares directly from the plan when there are so many ways to avoid the issue. I stand my advice you would be wasting your money to go to an attorney. Answers to non-technical people should follow the KISS principle: Keep It Simple Stupid works well. Reality does bring up a good point you could ask if they think a money market is prudent to invest your money. Or better take your funds out of the ESOP and get a better set of investments of our choosing in an IRA if you want.

I would have been in jr high (what middle school was called in the '70s for you Gen Z) when Visicalc had its day. I seem to recall the name when you bring it up but I don't think I used it ever.

I did too

I believe you can amended a plan to say anyone who worked at least one hours on or after 1/1/2025 will be on this vesting schedule (describe the new 5 year schedule). I know I have seen those types of amendments back when you were made to shorten you schedule back in the mid 2007s. Your criteria is non-discriminatory and treats anyone who have the same set of facts the same. Anyone who termed before 2025 isn't have their vesting schedule changed so you don't have to offer then anything.

At least get into the '80s and get on Lotus 123 man!

Slow reply but no you do not have to do an RMD. The shares in the ESOP do not count for ownership and if they sold before they turned 70.5/73..... there is no RMD.

We use FT Williams. We tried to help a client file a 5330 to pay the excise tax for an over contribution. FT Williams tells us the filing rejected because the form was late and money was due. They however don't give us any insight how to get the payment and filing done in the correct order. If anyone has done this successfully we could use some insights on how to do this. This was so much easier with the old paper forms.

There is nothing stopping them from using the 12/31/2024 stock price as long as it all happens on or before 12/30/2025. (Edit date from 12/20/2025 to 12/30/2025) There is nothing you can do. This is common and done all the time in this industry. The plan is on very solid ground. If you hire a lawyer you will be spending money to only lose. I would add it seems hard to know the value will 3x. But this is the reason ESOPs do what is happening. Management doesn't want to compensate former employees but want the increase to go to current employees who they see as being the primary contributors to the increase at this point.

Darrin you are the one and only person who has ever done singing continuing education classes that I have been in. You bring up your name in this industry and the conversation turns to the signing instructor. You also taught all of us a lot in those classes. Enjoy retirement.

Despite the list of authorized providers we just filed a 5330 electronically using FT Williams (although I guess it could have been via the government's system) a couple of weeks ago. I just made sure I liked the numbers and passed it on to someone here who knew how to do it but I am sure it was electronic. I believe it was agreed we could have done paper but we did file electronically. It was for a PYE 2024 ESOP.

There has to be a bona fide separation however. If there is an agreement the person will be brought back you can't pay them a benefit. The classic example is a person who is terminated with the understanding once they get their benefit paid they will be rehired. This isn't exactly the same but if there is some kind of commitment to bring this person back after a given period of time I have my doubts. If this is a layoff and it is simply if things turn around we will take you back there would be a bona fide separation. I think you need more data regarding this.

Number nerds hanging around here? I doubt that.

The question of when a person enters or re-enters a plan and if they get a contribution are two separate questions. I am constantly telling clients to stop mixing the two together. You first decide if the person is a participant. If not, they can't get a contribution. If so, you see if they meet the requirements to get a contribution allocation. So yes a person can re-enter and if they work too few hours not get a PSP contribution.

The other topics/questions seem pretty well covered so I am going to reply to just this part. This comes up in the ESOP world a lot. I have 4 12/31/2024 ESOPs that are audited plans and still don't have their 12/31/2024 stock price yet. Obviously they aren't going to be ready to file a complete 5500 by the 15th. Up until a few years ago we wouldn't hardly bat an eye at the idea of put a pdf letter saying the auditor's is ready we will file an amended return once it is ready. Not anymore, our firm's rule is a hard we will only file with that attachment if the client or auditor writes that attachment and gives us written instructions to file that way. Our only recommendation is file late an DFVCP. Management is very clear on this. Why? It hasn't happened a lot but it has happened a few times the government has taken the position a 5500 without an audit report is an incomplete return and said the amended return wasn't an amended return but the first legit, and late, filing. They have sent a penalty notice with a very large number on it. So far we have gotten them to waive the penalty by writing a letter. The simple fact is while the odds of that happening seems very low the cost is very high. The DOL penalty is a few grand/day with no cap! On the other hand the worst you pay under the DFVCP is $4,000. The risk of getting hit with that DOL penalty is just not worth it regardless how small you think the odds are. Our management will not allow us to put our firm at risk of having to pay that kind of money by a client saying, "but xyz firm told us it was ok". Just thought I would add that to this discussion. See https://www.newfront.com/blog/form-5500-updates-participant-count-win-and-large-plan-filer-warning I quote: There have been rumblings in the retirement plan industry of informal DOL comments suggesting that the ability to “negotiate” the penalty is going to be much more difficult going forward. Apparently, the DOL intends to crack down on the “file without the audit” approach unless the amended return is filed with the complete IQPA attached before the Rejection Letter is issued (for those keeping track – that is before the 30th day after the extended filing deadline). If the employer is not 100% certain that the IQPA is going to be completed by the end of October or first week of November (for calendar year filers), be aware that this approach may start costing significantly more than Option 2 and there will be little room to negotiate down the initial assessment.

And doing them all at once is the least costly option as the max amount is based upon filing with the DOL not forms.