With 35 years of experience, we know exactly what you need, and we can provide you with the most comprehensive range of ESOP administration services available on the market. You can be assured continued plan qualification as we will:
determine employee eligibility based on your individual Plan specifications;
maintain historical records of each employee - including compensation, hours, hire and rehire dates, leaves of absence and distributions - to ensure we are aware of each employee’s unique situation which can have an effect on benefits and eligibility;
track each employee’s years of service, years of participation and vesting;
calculate benefit and contribution amounts and ensure that the limitations under Code sections 404 (contribution deductions) and 415 (annual benefits) will not be exceeded;
allocate annual contributions, leveraged ESOP share release, dividends or S-corporation distributions, internal and external stock sales and purchases, trust earnings, forfeitures, etc.;
track distributions, stock diversification distributions, pass-through dividends, loans and hardship distributions;
perform all required testing to show that the ESOP is not discriminatory, as required under Internal Revenue Code and, if necessary, take the necessary steps to ensure compliance. This includes but may not be limited to:
Non-discrimination in amount of benefits provided (IRC Section 401(a)(4));
Compliance with the allocation restrictions when a selling shareholder elects non-recognition of capital gain on the sale of shares to the ESOP (Code Sections 409(n) and 1042);
Assurance that the stock allocation does not result in a "non-allocation year" in the case of S-corporation sponsored ESOPs (IRC Section 409(p));
Minimum coverage requirements (IRC Section 410(b));
Annual additions testing of all Company sponsored plans, including those we may not be administering (IRC Section 415);
Top-heavy testing (IRC Section 416).
determine whether or not a partial plan termination has occurred and apply appropriate vesting requirements;
determine that the plan definition of compensation is non-discriminatory (IRC Section 414(s));
prepare signature-ready Annual Return/Report Form(s) 5500 and all required Schedules. RKS will provide e-filings of client's returns as required by law. In the case of larger plans, we also work directly with your auditors to ensure that they have all the necessary information to complete their audit of the plan(s);
prepare and supply you with all required participant disclosure information, including individual account statement, Summary Annual Report, trust investment information, beneficiary designation form, Statement of Deferred Vested Benefits (if applicable).