Legislative and Judicial Actions
Chicago Consultant Faces New ESOP Lawsuit
The complaint claims ERISA violations against the company for allegedly deflating the plan’s value.
Court Rebuffs DOL’s ESOP Valuation Case Against Engineering Firm
One commentator who works in the employee stock ownership plan space says the ruling represents “one of the most comprehensive rebukes of DOL arguments” in such a valuation case.
Pandemic Proved Value of ‘S-ESOP’ Employee Ownership
Workers at employee-owned S corporations, who invest in and own their employers via ‘S employee stock ownership plans,’ report being on significantly more stable financial ground than other U.S. workers.
Proposed Bill Would Give 403(b) Plan Sponsors Access to Open MEPs
The SECURE Act's provisions for pooled employer plans (PEPs) did not apply to 403(b) plans.
Republic, GreatBanc Agree to Settlement of ESOP Lawsuit
The lawsuit alleges a series of bad-faith dealings were made that caused losses to the ESOP while benefiting executives.
Wilmington Trust to Pay $80 Million to Settle DOL Investigations
The DOL alleged Wilmington Trust caused losses to ESOPs when it authorized them to pay more than fair market value for privately held employer stock.
Legislative and Judicial Actions
Sharing Ownership
Wawa ESOP Case Stayed Until Settlement Agreement Drafted
A judge previously found eliminating ESOP participants’ right to invest in company stock is not a violation of ERISA’s anti-cutback provisions, but forcing participants with balances greater than $5,000 out of the plan may be.
Wilmington Trust to Pay $5 Million to Settle ESOP Lawsuit
The motion cites as one reason for settlement “probable costs, in both time and money, of continued litigation.”
Employee-Owned
Advisers’ Future Trajectory
Court Finds Former ESOP Participant Released Claims to Sue
A federal court judge found a severance agreement was broad enough to cover Employee Retirement Security Act (ERISA) claims against the trustee of an employee stock ownership plan (ESOP).
ESOPs Can Reduce Wealth Inequality
IRS Discusses Ways ESOPs Can Prevent Violation of Nonallocation Year Rules
Since there are no prescribed correction methods to address Internal Revenue Code Section 409(p) violations, prevention methods are important considerations for both employee stock ownership plan design and operation, the IRS says.
ESOPs Offer Additional Business Opportunity for Retirement Plan Advisers
IBM Stock Drop Litigation Revived by 2nd Circuit
The decision breaks from other cases in which district and appellate judges have found plaintiffs did not meet strict pleading standards established by the influential Dudenhoeffer decision.
ESOPs Can Boost Company Performance and Participant Savings
For the third year in a row, respondent companies to the ESOP Association's annual survey saw profits rise more than revenue, and a more than half of companies contributed more to their ESOPs than the average 401(k) match.
DOL Called Out for Lack of ESOP Guidance
A letter to the president from members of Congress asks for protection against the DOL's practice of “regulation through litigation.”