BASIC ESOP ADMINISTRATION - The ESOP Association

More documents

Recommendations

Info

John Burgess - Seyfarth Shaw LLPJonathan Markham – Blue Ridge <strong>ESOP</strong> AssociatesNondiscrimination Test – 401(a)(4)• Ensures that benefits do not discriminate in thefavor of HCEs.▫ Safe Harbor – If contributions and reallocatedforfeitures are allocated pro-rata to compensationand the compensation definition is consideredsafe-harbor under 414(s) then no testing isrequired▫ Non-Safe Harbor – if the plan uses compensationthat is not a designed safe-harbor or if the planuses a points method of allocation then the planmust be tested using the general test.
John Burgess - Seyfarth Shaw LLPJonathan Markham – Blue Ridge <strong>ESOP</strong> AssociatesMaximum Deductible ContributionLimit - 404• Under Section 404(a)(3) the total amount ofdeductible contributions to all qualified planscannot exceed 25% of covered compensation.▫ Individual compensation is limited to $255,000 in2013▫ Compensation is not limited by ‘mid-year’compensation election• Under Section 404(a)(9) leveraged C-Corporations do not have to apply interestpayments on exempt loans to the contributionlimit.
Page 1 and 2: BASIC ESOP ADMINISTRATIONESOP Invit
Page 3 and 4: John Burgess - Seyfarth Shaw LLPJon
Page 21: John Burgess - Seyfarth Shaw LLPJon

BASIC ESOP ADMINISTRATION - The ESOP Association

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?