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ESOP FACT#3

ESOP FACT#3RETHINK Benefit Plans

Understanding Employee Stock Ownership PlansESOP FACT

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Aronson LLC has been thinking ahead for its clients for more than 50 years. As business advisors to today’s most active industry sectors, Aronson’s experts provide innovative audit, tax, and consulting services that help clients rethink the way they do business.

RETHINK Everything

Aronson LLC’s dedicated team of employee benefit plan auditors focus on

all types of plans and have significant experience with ESOPs, including:

• Newly implemented plans with their first leveraged or

non-leveraged stock transaction

• Resolving errors noted in the annual ESOP valuation

• Resolving allocation errors noted in the annual recordkeeping

for the plan

• Terminating plans

• Plans with interest rate swaps

• Plans selected for IRS and/or DOL review

ESOP PLANS What We Do

If your 401(k) plan requires an audit, odds are that your ESOP does too, but the similarities end there. Read our fact pages to learn more!

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ESOP FACT

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Selecting an experienced benefit plan auditor is one of the most important

decisions you can make for your business. Our dedicated team of experts is

uniquely qualified to help you navigate the nuances and complexities of ESOPs

and all other types of plans.

• Our industry-trained experts help you understand new laws, changing

regulations and industry developments.

• Aronson has been ranked by the DOL as one of top 25 largest employee

benefit plan practices in the country.

• Our practice has successfully passed DOL inspection with no deficiencies

found.

• Aronson is an AICPA Employee Benefit Plan Audit Quality Center member.

• Aronson is a PCAOB registered company.

Aronson’s experienced benefit plan experts help you rethink your approach to

ESOP plan compliance and best practices for your business.

THE ARONSON ADVANTAGE

In recent years, the Department of Labor has targeted ESOPs for inadequate company stock valuations, so ensuring that your ESOP is accurately valued is of utmost importance.

FACT #1

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DID YOU KNOW...

Unlike 401(k) plans, most ESOPs do not have a certification covering investments,

which permits a limited scope audit. As a result, the auditors must test investment

valuation and related activity.

Evaluate the competence and capabilities of the specialist used in valuing the stock

of the ESOP. Look for experienced experts to ensure that appropriate methodologies

and industry benchmarks are used.

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ESOP FACT#3

ESOP FACT#3

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Improper allocation of shares not only affects your plan financials, but corporate financials and tax returns as well.

Leveraged ESOPs (ESOPs that have debt outstanding which was used to purchase the

stock) add another layer of complexity to plan accounting.

Dependent on debt payments made during the year, an allocation between the

allocated and unallocated shares will be recorded on the plan’s financial statements.

The allocation methodology must be based upon your plan document’s stipulations.

FACT #2

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DID YOU KNOW...

In addition to our employee benefit plan services, Aronson’s ESOP expertise includes:

Forensic and Valuation Services > Aronson’s forensic accountants not only

perform valuations for various entities, but also assist the Employee Benefit Plan

Services Group in assuring proper methodologies are used in plan

valuations.

Corporate Financial Reporting > Aronson’s skilled assurance professionals are

well-versed in ESOPs and how your ESOP will impact corporate financial reporting.

Corporate Tax > Aronson’s tax practitioners understand the tax ramifications

resulting from ESOP transactions and can help your company and its shareholders

minimize tax costs.

Mergers & Acquisitions > Our investment bank branch, Aronson Capital

Partners, provides strategic advisory services to help determine if an ESOP

is the right fit for you.

ADDED VALUE MEET THE TEAM

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ESOP FACT#3

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FACT #3

ACTION

ESOP Accountant’s Opinions are one of the Department of Labor’s favorite targets for review when submitted as part of the Form 5500. A deficient audit may lead to multiple regulatory inquiries and significant penalities.

DID YOU KNOW...

ESOPs are very different than any other qualified retirement plan and many accounting firms

have little or no experience auditing them.

Develop a clear understanding of your auditor’s ESOP experience. Qualified auditors will have

many years of ESOP audit experience, perform several audits annually, and perform audits of

ESOPs that are in various stages of the maturation process.

“The firm provides one-stop service for all of our needs, and throughout the years, they’ve been able to provide great team continuity on engagements, proactively offering sound technical advice.”

— Phuong Truong, Adams Communication & Engineering Technology, Inc.

“Aronson’s auditors always listen to our needs and concerns and deliver solutions in a timely manner. I value their advice and expertise, and I look forward to working with the Aronson team every year!”

— Marion Vainumae, Carter Consulting, Inc.

“As a client for over 10 years now, we have always been extremely happy with the quality and level of service that Aronson has provided. Aronson’s staff is very responsive, knowledgeable, and easy to work with.”

— Lamar Edwards, Plexus Scientific Corporation

WHAT CLIENTS ARE SAYING MEET THE TEAM

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ESOP FACT#3

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CONNECT WITH ARONSON

Employee Benefit Team

Kathryn Petrillo, Partner301.231.6233kpetrillo@aronsonllc.com

Amanda Fuller, Partner301.231.6289afuller@aronsonllc.com

Mark Flanagan, Director301.231.6257mflanagan@aronsonllc.com

Aronson LLC

Main 301.231.6200Fax 301.231.7630

Online Resourcesaronsonllc.comaronsonllc.com/blogs

Address805 King Farm BoulevardSuite 300Rockville, Maryland 20850

Social Media

Aronson takes pride in being an active member of the social media community. Don’t forget to Follow, Like and Share!

Aronson shows companies how to be more profitable, more competitive and better prepared for the future. Aronson’s proactive approach of identifying opportunities and addressing challenges head-on allows its clients to focus on their core business. Are you interested in learning how Aronson can help you? Contact us today!

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Team Leaders

Kathryn Petrillo PartnerExperience: 25+ years

Amanda FullerPartnerExperience: 14+ years

Mark Flanagan Director Experience: 25+ years

Jillian GobboManagerExperience: 10+ years

Kayla KaniaSenior ManagerExperience: 10+ years

Emily ShapiroManagerExperience: 9+ years

Caitlin LynchManagerExperience: 6+ years

Mindy JonesSenior AccountantExperience: 10+ years

Ho-Ming FongManagerExperience: 7+ years

Katie Sciandra Manager Experience: 7+ years

Senior Staff

Composed of six team leads and five senior staff, Aronson’s benefit plan practice is unique in that they have a full-time staff dedicated to employee benefit plan services, something not seen in most other firms.

805 King Farm Blvd., Suite 300 | Rockville, Maryland 20850 | 301.231.6200 P | aronsonllc.com | info@aronsonllc.com