10
OPINION
E very year, thousands of business mergers and acquisitions occur, but only a few transactions reach headlines. Several steps go into executing a successful merger or acquisition, but one of the very last or overlooked aspects of M&A are the retirement plans of the two parties. Retirement plans play a critical role in M&A and should not be overlooked during planning or integration. Corporate retirement plans in M&A
CJ LaPorta, CFP, CRPS, AIF
Having a structurally sound and well-performing retirement plan, such as a 401(k), cash balance plan, non-qualified plan, or ESOP is valuable for your company and its employees, but it also plays a critical role when looking to merge with or acquire another company. A well-qualified advisor can assist you in building a solid retirement plan to attract and retain talent, create successful retirement illustrations for business owners and their employees, and provide knowledgeable assistance throughout the M&A process. Outside of the M&A process, attracting and retaining top talent continues to be a hard-fought battle. Offering a competitive retirement plan with great employer contributions, vesting schedules, sound investment options, etc. all work together to attain and retain talent. Attracting key executives and
keeping them with your company is an even harder battle. This is where offering a non-qualified plan comes into play. Non-qualified plans are innovative tools to help your company stand out, but also recruit, retain, reward, and retire your key employees. Now, what happens if you are going through the M&A process? An advisor who specializes in retirement plans can aid you in choosing the best option for your company during the M&A process. Pre- and post-deal, non-qualified plans require special due- diligence to ensure compliance with IRC Section 409A. To focus on 401(k) plans, there are two main options in the M&A process, merge or terminate. When two retirement plans merge, there are several items that need to be taken into consideration. First, is the transaction a stock or asset purchase? More commonly, we will see a stock purchase where the
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THE ZWEIG LETTER AUGUST 11, 2025, ISSUE 1597
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