Destel-Bergen Corporation

Qualifying Employer Securities

Pension law provides a provision for a corporation sponsoring a qualified retirement plan to hold shares of the sponsoring corporation as a plan asset. Shares held in the plan in this way are referred to as Qualifying Employer Securities. Having the option of including qualifying employer securities as a retirement option provides several advantages for a business owner. Often, when a company needs money to expand or cover costs during periods of slow business, it's only alternative would be to borrow the money, burdening the company with loan and interest payments. Qualifying employer securities allow the company to provide financing with equity from your retirement account instead, eliminating interest costs and freeing the company from the financial burden of regular loan payments. If you are considering employer securities as a plan investment, please consider the following restrictions:

- Your company must be a corporation to issue qualifying employer securities. C-Corporations do not have restrictions on who can hold shares in their retirement accounts, and it is highly recommended that the company be a c-corporation.

- Because the shares are held in a retirement account, they can eventually be subject to distributions, which are taxable. Depending on the proportion of the shares that a person holds personally, they may be subject to minimum required distributions starting at age 70 1/2. If you contact our office we can consult you on how future distributions may affect you.

Pension Transfer Trust Plan

The Pension Transfer Trust Plan is a defined contribution multiple employer plan oriented toward investment in qualifying employer securities. Please visit our multiple employer plan page for more information about the Pension Transfer Trust Plan.