ESOP and ERISA Advisory
Kroll's Corporate Finance ESOP/ERISA practice is a leading corporate finance and valuation advisor to companies and ERISA fiduciaries. Duff & Phelps acquired Kroll in 2018 and unified under the Kroll brand in 2020.Contact us
With completing over 1000 assignments, we are the firm of choice for structuring, raising financing, fairness opinions, and valuing stock in employee stock ownership plan (ESOP) transactions and nonpublic assets, including employer securities held by ESOPs and ERISA pension plans. A pioneer in ESOP planning and transaction execution, we guide principals, companies and fiduciaries through the complex financial and valuation implications of the financial, regulatory and tax aspects of these transactions.
- Fairness opinions
- Initial ESOP transaction execution, feasibility, design, and structuring
- Arranging the financing in leveraged ESOP transactions
- Representing ESOP-owned companies for sale, or assisting an ESOP-owned company making an acquisition
- Valuations related to the sale, purchase, or contribution of stock to ERISA plans
- Valuation of illiquid assets, such as limited partnership interests or real estate, held in ERISA plans
- Advising ERISA fiduciaries in transactions
- Fairness and valuation opinions related to transactions by ERISA plans in illiquid assets
Frequently Asked Questions
What is an ESOP?
- An Employee Stock Ownership Plan or ESOP is a qualified defined contribution benefit plan (like a 401K) with two special benefits:
- ESOPs are designed to invest primarily in the stock of the sponsoring company and, as such, ESOPs are exempt from the diversification requirements of other qualified plans.
- ESOPs are allowed to borrow money to fund the purchase of employer securities
- Created by Congress in 1974 to enable employees to participant in the wealth creation process
- To encourage the formation of ESOPs, Congress put in place significant tax incentives
What are the benefits of an ESOP?
- Employees build wealth for retirement
- Employee-owned companies outperform their peers
- Tax advantaged ownership transition tool for business owners
- Tax incentives to companies sponsoring ESOPs
What are types of ESOPs
- Leveraged ESOP: ESOP borrows money to facilitate the purchase of company stock
- Unleveraged or Contributory ESOP: Company makes periodic contributions of stock or cash which are later used to purchase stock
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