Age 55 Diversification. 18 th Annual Ohio Employee Ownership Conference Presented by Dorn Swerdlin Swerdlin & Company Friday, April 16, 2004. What We Will Discuss . Basic Rules Examples Timeline Election Forms Acting on Election Diversification Calculations Sticky Issues. Basic Rules.
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18th Annual Ohio EmployeeOwnership Conference
Presented by Dorn SwerdlinSwerdlin & CompanyFriday, April 16, 2004
10 years ofparticipationin plan
Able to diversify 25% of qualifying shares
Final option to diversify up to50% of qualifying shares
Any shares that have been previouslydiversified
Total of allocationshares that haveever been eligiblefordiversification
Market Value $500
Effective Date of ESOP:January 1, 1980
Diversification Occurs:Age 55 and 10 years of participation
KL Corporation also sponsors a 401(k) Plan
Date of Birth:January 1, 1935
Date of Participation: January 1, 1995
10 years plan participation(eligible for diversification)
Appraisal and Allocation Complete
Preliminary Election Form
Returns Preliminary Form
Final Election Form
LK Attains Age 55
Joins PlanDiversification Timeline
Preliminary 2004 Diversification Election Notice
Final 2004 Diversification Election Notice
Final 2009 Diversification Election Notice
If the plan allows the participant to diversify more than the number of shares required under the Code, there are no provisions under the Code or regulations allowing those shares to be deducted from the amount available for diversification during the qualified election period. However, they must be included in determining the total number of post 1986 shares allocated to the participant's account.
General yearof servicedefinition
1,000 hours ofservice withina 12-month period
Vesting: 1,000 hours of service in a plan year
Eligibility:1,000 hours during initial year of employment and anniversaries thereof – or – if fewer than 1,000 hours during initial year of employment, measurement period reverts to plan year
What About Terminated With a Vested Account Balance?
What Happens When Plans Merge?
Employer sets up new ESOP
Mergesexisting 401(k) intoESOP
Right Away:Participants may have 10 years ofparticipation if you include their years in the 401(k) plan