BUCKS COUNTY ESTATE PLANNING COUNCIL

REMINDER: WE ARE MEETING BACK AT THE DOYLESTOWN COUNTRY CLUB

PLEASE NOTE: IF YOU CHOSE THE PRE-PAYMENT OPTION AT RENEWAL

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ESOP as an Estate Planning Option

(Employee Stock Ownership Plan)

Join us for a panel discussion on Employee Stock Ownership Plans (ESOPs), with James G. Steiker and Ken Baker, moderated by Ed Wilusz.

James G. Steiker is Chairman and CEO of SES Advisors, Inc. and Founding Partner and Chairman of its sister law firm, Steiker, Greenapple & Fusco, P.C. Jim is a corporate, pension and tax attorney and financial advisor with more than 30 years of experience in Employee Stock Ownership Plans (ESOPs) and other employee ownership matters, focusing primarily on ESOP design, transactions and compliance in entrepreneurial companies.

Jim is the past Chair of the ESOP Association's Advisory Committee on Finance and currently serves on the ESOP Association Board of Governors. He is also a past trustee of the Employee Ownership Foundation and a past member of the Board of Directors of the National Center for Employee Ownership. He is a frequent speaker and author on ESOP matters and serves as a director of nine ESOP companies.

Jim is a graduate of New York University School of Law, where he was a Root-Tilden-Snow Scholar, and of Wesleyan University.

Ken Baker is the CEO of New Age Industries, a manufacturer and fabricator of thermoplastic and thermoset tubing and hose located in Southampton, Pennsylvania. In January 2006, the company became employee owned, called an ESOP (Employee Stock Ownership Plan), the program involves the selling of 49% of the company, via shares of stock, tothe employees as part of their retirement benefits. Mr. Baker will be speaking to the membership of the Bucks County Estate Planning Council to provide insight and his first hand experiences setting up and maintaining an ESOP for other companies.

As of 2015, the National Center for Employee Ownership (NCEO) estimates that there are roughly 7,000 employee stock ownership plans (ESOPs) covering about 13.5 million employees. About two-thirds of ESOPs are used to provide a market for the shares of a departing owner of a profitable, closely held company. Most of the remainder are used either as a supplemental employee benefit plan or as a means to borrow money in a tax-favored manner. Less then 10% of plans are in public companies. In contrast, stock option or other equity compensation plans are used primarily in public firms as an employee benefit and in rapidly growing private companies.

Companies set up a trust fund for employees and contribute either cash to buy company stock, contribute shares directly to the plan, or have the plan borrow money to buy shares. Contributions to the plan are tax-deductible and employees pay no tax on the contributions until they receive the stock when they leave or retire. They then either sell it on the market or back to the company. According to a 2010 NCEO analysis of ESOP company government filings in 2008, the average ESOP participant receives about $4,443 per year in company contributions to the ESOP and has an account balance of $55,836. People in  the plan for many years would have much larger balances and in addition, 56% of the ESOP companies have at least one additional employee retirement plan. (Information provided by ESOP.org)

Meeting Sponsors