are so complicated. How does Blue Ridge keep track of all the laws
is a crucial part of our business to know every rule and regulation
that could effect the operation of our clients' ESOPs and 401(k) plans.
We obtain this knowledge in a variety of ways, including the following:
We subscribe to several on-line services that provide updated information
on all qualified plan issues, including Internal Revenue Service and
Department of Labor rulings.
We attend the conferences held by national organizations that promote
ESOPs and employee ownership, such as The
ESOP Association, the National Center
for Employee Ownership, and The
These conferences provide a wealth of information on ESOP technical
and communications issues.
We network with our colleagues in the business--attorneys, appraisers,
outside trustees, bankers, investment advisors and other third party
administrators--to come to an understanding of "best practices" and
accepted procedures in situations for which there are no black and
We hold regular internal meetings and use day-to-day communications
to apprise all plan administrators of new developments in the law and/or
practices and to share new and/or unusual issues and their solutions.
do Blue Ridge clients find out about changes in the law that might
affect their plans?
|Any new ruling or regulation that could
affect clients' ESOP or 401(k) plans is communicated in a timely manner
to those clients via telephone, email or regular mail. Changes in the
law are also readily available to all clients through this web site.
|I've never used a third
party administrator for an ESOP before.
How do I know what to do and when to do it?
|Blue Ridge can provide you with a timeline
as to what steps are involved in maintaining your plan from year to
year, and when they are likely to happen. It will include who is responsible
for each step (Blue Ridge or the client), and you can add the names
of the people in your company who will be responsible for each piece
of the work.
do I know if an ESOP is right for my company?
|Generally speaking a company should be
a certain size before considering employee ownership through an ESOP.
There are special studies that can be run by ESOP professionals to
check on the feasibility of an ESOP for a particular company. For more
information, see the following web sites:
The ESOP Association (TEA) www.esopassociation.org
National Center for Employee Ownership (NCEO) www.nceo.org
The Beyster Institute www.beysterinstitute.ucsd.edu
do I communicate the value of employee ownership to my employee owners
without creating 150 "presidents"?
|This is a very good question and actually
has a relatively simple answer--education. When communicating the
value of being an employee owner, it is crucial to present each employee's
position as his/her position on a team. The team can only work when
everyone understands and plays his/her position well. When properly
conveyed, it is this knowledge of how the team works together that
prevents misunderstandings about the true meaning of ownership through
|If Blue Ridge is my third party administrator, what do I have to do?
In your first year with Blue Ridge, we will need basic information from you to set up your client file. Items such as plan document, SPD, prior Forms 5500 and SAR’s, transaction information, stock history, family relationships and names of your other providers, are examples of the information we ask you when you become a client.
In addition to the census, we also need financial information about the plan, loan documents (if the plan is leveraged), and contribution information. Our goal is to make the transfer of information as seamless and painless as possible.
Every year, we ask for similar information. Blue Ridge works with your payroll/human resources staff to help you locate and format the information we need to complete your ESOP compliance and recordkeeping for the appropriate Plan Year. This information begins with, but may not be limited to, a complete census of all the people who have worked for the company during the plan year. Information needed includes full name, social security number (not to be repeated in its entirety on any other information), date of birth, date of hire, date of termination (and cause), hours worked during the year, gross compensation, W-2 compensation. As we verify each employee, we may find discrepancies that will generate questions for you to answer.
|How much contact do you have with your clients throughout the plan year?
If you are a Blue Ridge client, be prepared
to talk with us throughout your plan year. Let us know when
you have questions about distribution amounts—better yet, let
us do your distribution processing altogether. Let us know
if you are buying more stock or are planning another leveraged transaction.
|How can I find out what makes my ESOP tick technically?
Blue Ridge we have found that our communications with our clients goes far more smoothly if we’re all on the same page. To this end, we spend time educating and explaining ESOP issues to our clients. It is much easier to work with your ESOP if you have some knowledge about how the pieces fit together. In addition, we can provide you with a list of sources for further information about ESOPs.
|How do you work with my other advisors?
Blue Ridge handles over 250 ESOPs nationwide. Each one of them comes with an attorney, appraiser and other advisors who put the plan into place. Often, we find that we already work with clients who use these advisors. In all cases, we develop a professional relationship with them, so as to provide you with the most seamless administration possible.
|What can I do to make the process smoother?
It is often easiest to designate one person to be the ESOP contact. This should be a person who understands or can learn your ESOP and who has the authority to gather information from other parts of the company if necessary, including payroll information. Remember that this is the person who will be answering most of the questions posed by other employees as well as by top management.
Keep your records in good shape from year to year. Fill out all requests for information promptly and completely. If you don’t understand a request, call your Blue Ridge administrator and ask for clarification.
Allow your administrator access to your ERISA attorney or other counsel. Often questions are better posed and answered between two professionals.