RETHINK. Benefit Plans MEET THE TEAM ESOP FACT ESOP FACT ESOP FACT WHAT WE DO. Understanding Employee Stock Ownership Plans

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1 RETHINK Benefit Plans Understanding Employee Stock Ownership Plans WHAT WE DO #1

2 ESOP PLANS What We Do #1 RETHINK Everything 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. 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 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!

3 THE ARONSON ADVANTAGE 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. FACT #1 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. ACTION 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. #1 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. DID YOU KNOW... 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.

4 ADDED VALUE 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. FACT Leveraged ESOPs (ESOPs that have debt outstanding which was used to purchase the stock) add another layer of complexity to plan accounting. ACTION 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. 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. DID YOU KNOW... Improper allocation of shares not only affects your plan financials, but corporate financials and tax returns as well.

5 WHAT CLIENTS ARE SAYING 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. 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 FACT ESOPs are very different than any other qualified retirement plan and many accounting firms have little or no experience auditing them. ACTION 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. 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. DID YOU KNOW... ESOP Accountant s Opinions are one of the Department of Labor s favorite targets for review when submitted as part of the Form A deficient audit may lead to multiple regulatory inquiries and significant penalities.

6 CONNECT WITH ARONSON 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. 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! Employee Benefit Team Kathryn Petrillo, Partner kpetrillo@aronsonllc.com Amanda Fuller, Partner afuller@aronsonllc.com Mark Flanagan, Director mflanagan@aronsonllc.com Aronson LLC Main Fax Online Resources aronsonllc.com aronsonllc.com/blogs Address 805 King Farm Boulevard Suite 300 Rockville, Maryland Social Media Aronson takes pride in being an active member of the social media community. Don t forget to Follow, Like and Share! Team Leaders Kathryn Petrillo Partner Experience: 25+ years Kayla Kania Senior Experience: 10+ years Amanda Fuller Partner Experience: 14+ years Jillian Gobbo Experience: 10+ years Mark Flanagan Director Experience: 25+ years Emily Shapiro Experience: 9+ years Senior Staff Ho-Ming Fong Experience: 7+ years Katie Sciandra Experience: 7+ years Caitlin Lynch Experience: 6+ years Mindy Jones Senior Accountant Experience: 10+ years

7 805 King Farm Blvd., Suite 300 Rockville, Maryland P aronsonllc.com info@aronsonllc.com