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SEPT/OCT 2024
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GET READY FOR OUR ANNUAL WALK TO END ALZHEIMER’S! Mark your calendars and join us for the Walk to End Alzheimer’s! Gather your friends and family on Saturday, Sept. 28. Your participation means hope for a world without Alzheimer’s. Save the date and walk with us!
Engaged Employees, Thriving Businesses
WHY ESOPS ARE REVOLUTIONIZING THE WORKPLACE
Move aside jack-o-lanterns and trick-or-treating, October also brings Employee Ownership Awareness Month! I am excited to share with you some valuable insights during this month-long celebration that highlights the profound benefits of Employee Stock Ownership Plans (ESOPs) and aims to raise awareness about the importance of employee ownership. While an Employee Stock Ownership Plan (ESOP) may seem like any old retirement plan, it has more layers than most other retirement plans. ESOPs are designed to inspire employees and contribute to business longevity. Our firm has been involved with ESOPs since 1996, representing companies and trustees who provide employee ownership. While we are not an ESOP company, we are dedicated to supporting and representing ESOP businesses, ensuring they thrive and succeed. ESOPs are governed by many of the laws and regulations that handle 401(k) plans, but they offer more advantages to businesses, owners, employees, and communities. The most well- known benefit of an ESOP is the boost in employee engagement it creates. ESOPs allocate company stock to all eligible employees through a qualified ERISA Trust, making them beneficial employee-owners. This ownership stake means that employees share in the rewards if the company stock rises and bear some risk if the stock falls. As a result, they are more invested in helping the business flourish and more likely to address problems proactively, such as assisting underperforming co-workers.
Another major advantage of ESOPs is that most require no out-of-pocket contribution from employees. Contributing to a 401(k) each paycheck can financially strain many people. For employees in such situations, an ESOP might be the only retirement plan they can afford to participate in since employee contributions are not allowed. This accessibility helps ensure a broader range of employees can build a secure financial future. ESOPs also play a crucial role in narrowing the wealth inequality gap. Employees at ESOP companies, on average, have higher wages and greater savings than those at non-ESOP companies. A 2019 study found that ESOPs help shrink gender and racial wealth gaps significantly. In the study, low- and moderate-income employees had a median ESOP account value of $165,000, with a maximum of $6 million. Conversely, most American households have around $17,000 in savings. Those closest to retirement (ages 60 to 64) in the study had ten times more wealth than the typical American in that age group. The impact of ESOPs is substantial. In 2018, ESOPs distributed $126.7 billion nationally, benefiting over 10.5 million employee-owners in the United States. To put that in perspective, there are more ESOP employee-owners than there are workers in the entire auto industry. Currently, there are 6,549 ESOP companies nationwide, showcasing the model’s widespread adoption and success.
Scan to register to join us for the Walk to End Alzheimer’s on Sept. 28!
benefits of ESOPs and encourage more businesses to consider this rewarding model. Promoting employee ownership can create more engaged, productive, and financially secure workforces, ultimately benefiting our communities and economy. At our firm, we support and represent ESOP businesses, providing the legal expertise and guidance needed to navigate the complexities of employee ownership. We believe in the power of ESOPs to transform businesses and lives and are committed to helping our clients achieve the many benefits of employee ownership. Together, we can build a brighter, more equitable future for all employees. – Brian Eagle 317-726-1714 1
Every October, we celebrate Employee Ownership Awareness Month. This is a time to promote the
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BASKETS OF FUN Apple Picking With the Whole Family
Most of the apples you find in stores are ripening now, making September prime apple- picking season! When green apples begin to turn yellow and red apples brighten in color, they are ready to be gathered up. If you are looking for a great excuse to get out in nature with your family or just hankering for some fresh produce, then apple picking is the thing for you. Orchards all over the country have a you-pick season so you can bring home your own fresh apples. Here is how to get in on the apple-picking trend right now! How do you like them apples? If you and your kids aren’t paying to pick apples, and you don’t have the owner’s permission, that’s stealing. If you (or someone else) pay your kids to pick apples, that is child labor, which is, sadly, also illegal. Kidding aside, for
the most part, to pick apples at an orchard, you must pay for the privilege. Orchards all across the country have different varieties of apples ripening all the time. Whether you’re in Maine, Michigan, California, or somewhere in between, you are likely ready to go on an apple-picking frenzy with family! Enjoy the fruits of your labor. After a long day of picking apples and making memories, you need a place to put them. Sure, if you want to dig into your apples right away, a bowl on the counter is fine. But if you want to store these apples for safekeeping (or making pie, apple crisp, apple sauce, or myriad other things), keep them somewhere nice and cool, like a refrigerator. If you keep your apples cool, they’ll stay good for weeks, ensuring you can enjoy the fruits of your labor all month!
WHY 100% ESOP-OWNED S CORPS DON’T PAY FEDERAL TAXES The Power of ESOP-Owned S Corporations
Did you know that an Employee Stock Ownership Plan (ESOP) can create a tax-free company? Many people are not aware of this, but 100% ESOP-owned S corporations do not pay federal or, in almost every state, state income taxes. Let us break it down for you and explore why these entities are tax-free compared to their fellow C corporations. What Are S Corporations and C Corporations? S corporations are unique because they do not pay federal income tax directly. Instead, the shareholders pay taxes on their share of the company’s income. Meanwhile, C corporations must pay federal income tax at the corporate level when they distribute dividends to their shareholders, who have to pay taxes on that money. So, C corporations get taxed twice, but S corporations only get taxed once at the shareholder level. The Perks of ESOP-Owned S Corporations Now, here is where it gets interesting for ESOPs. An ESOP is a retirement plan that owns shares in the company. When an ESOP owns 100% of
an S corporation, it means the ESOP is the only shareholder. And guess what? ESOPs do not pay federal or, in almost every state, state income taxes. So, a 100% ESOP-owned S corporation does not pay federal income tax! It is like having a tax-free pass for the company. Why ESOP-Owned S Corporations are Tax-Free You might be wondering why these companies do not pay taxes. Since an S corporation’s income is passed through to its shareholders and the ESOP is a tax-exempt entity, the income is not taxed. This setup allows the company to keep more earnings, which can be used for growth, better employee benefits, and other important business needs.
Benefits for Everyone This tax-free status is a huge benefit for
businesses. It saves money that can be reinvested in the company. Plus, it helps align the interests of employees and the company because the employees, through the ESOP, are beneficiary owners of the company stock. This often leads to more motivated employees invested in the business’s success.
This setup offers big savings and plenty of benefits for businesses and their employees. So,
next time you think about business structures and tax savings, remember the power of 100% ESOP-owned S corporations.
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The Pawsitive Effects
Can you find all the highlighted words below? Word Search
EMPLOYEE STOCK OWNERSHIP PLAN BENEFITS
SHARES VESTED CONTRIBUTION INTEREST RETIREMENT
THE INTEGRAL ROLE OF PETS IN ENHANCING CHILDHOOD DEVELOPMENT
Performance Validation is an ESOP, Employee Stock Ownership Plan . The eligible employees will receive the benefits from this program in the form of shares that has a vested schedule. The contribution required from the employee is NOTHING. A direct financial interest in this type of plan is additional retirement fund at no cost for the employees.
We all know a family pet can bring a world of fun, but animal companions are actually proven to do much more than that! Pets are more than just your kids’
companions; they play a significant role in child development. Here’s how every child can benefit from growing up with a furry (or not-so-furry) friend.
Social Skills and Empathy Pets often serve as a child’s first friend and confidant. Interacting with a pet requires a child to read nonverbal cues and respond appropriately, which can enhance their empathy and understanding of emotional states. When a child learns to care for the needs of their beloved pet, they learn that other people also have needs and emotions that must be cared for. Health Benefits Numerous studies have shown that children with pets are less likely to develop common allergies and asthma. Surprisingly enough, it didn’t matter whether these kids grew up with cats or dogs; both were equally likely to help prevent asthma and certain allergies. Of course, children who have already been diagnosed can have their symptoms triggered by their furry friends. That’s why parents should consider introducing a pet as early as possible! Emotional Support Pets provide a unique comfort that can sometimes elude even the closest family members. During challenging or stressful times, a pet can comfort a child. A pet’s presence can be incredibly soothing and reassuring, providing a silent strength without the complication of human emotions. Fun and Adventure Let’s not forget that pets are fun! They bring laughter and joy to a household. Kids’ adventures with their pets — from exploring the backyard jungles with a trusty dog to hosting a tea party with a patient feline — can foster creativity and imagination. Pets truly make a home more vibrant and livelier. They teach lessons in love, life, and the joy of simple things. So, if you’re contemplating adding a pet to your family, know that the pitter-patter of little paws can benefit your child’s development. And let’s be honest, who wouldn’t want an extra dose of unconditional love around the house?
Made with fresh, juicy peaches and a buttery, golden crust, this peach cobbler is the perfect blend of sweet and tart.
INGREDIENTS
• 6 cups sliced fresh peaches • 1/2 cup granulated sugar • 2 tbsp all-purpose flour • 1/4 tsp ground cinnamon • 1/4 tsp ground nutmeg • 2 cups all-purpose flour • 1/3 cup packed brown sugar
• 2 tsp baking powder • 1/2 tsp salt • 1/2 cup cold butter, cut into pieces • 1/2 cup milk • 2 tbsp butter, melted
1. Preheat oven to 375 F and grease an 8-inch square baking dish. 2. In a large bowl, combine peaches, sugar, 2 tbsp flour, cinnamon, and nutmeg; mix until blended, then spoon into prepared dish. 3. In a medium bowl, combine 2 cups flour, brown sugar, baking powder, and salt. 4. Cut in butter with forks or pastry knife until mixture resembles coarse crumbs. 5. Add milk and stir until just blended. 6. Drop dough by spoonfuls onto peach mixture and drizzle melted butter on top. 7. Bake for 40–45 minutes or until top is golden brown. DIRECTIONS
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INSIDE THIS ISSUE
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Building Wealth and Unity, One ESOP at a Time The Joy of Apple Picking Discover the Tax-Free Perks of 100% ESOP-Owned S Corporations Explore the Positive Benefits of Pets for Kids Perfect Peach Cobbler Join Us for the 2024 Walk to End Alzheimer’s!
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As we approach the 2024 Walk to End Alzheimer’s, we want to extend a heartfelt invitation to join Team Eagle & Fein in this meaningful event. This walk is more than a fundraiser; it symbolizes hope and a fight for a brighter future for those struggling with Alzheimer’s. One in three seniors dies with Alzheimer’s or another dementia, and the disease claims more lives than breast cancer and prostate cancer combined. In 2024, the cost of Alzheimer’s and other dementias in the U.S. is projected to be $360 billion, with this number expected to rise to nearly $1 trillion by 2050. These staggering statistics underscore why we walk — to provide support, raise awareness, and ultimately end Alzheimer’s. This year, the Walk to End Alzheimer’s will occur on Saturday, Sept. 28, 2024, at Carroll Stadium on the IUPUI campus. Last year, thanks to incredible support, Team Eagle & Fein was recognized as the third top fundraising team in Indiana. We are immensely grateful and proud of this achievement and hope to surpass it this year with your help. Alzheimer’s affects people from all walks of life. Legendary coaches like Pat Summitt and Bob Knight also battled this relentless disease. Pat Summitt, renowned for her remarkable coaching
career, established the Pat Summitt Foundation to fight Alzheimer’s. Bob Knight, known for his passionate approach to basketball, faced this disease until his passing. Their stories remind us that Alzheimer’s can touch anyone, regardless of their achievements or status. I have shared the story of my dear friend Mike, who bravely battled Alzheimer’s until his passing in December 2023. Mike was a beloved friend, and we dedicate this year’s walk to his memory. Witnessing the cognitive decline of a loved one is incredibly challenging, and I know many of you understand this pain. This year, let us honor Mike’s legacy and everyone affected by Alzheimer’s by participating in the walk, raising funds, and working towards a cure for this devastating disease. Your involvement in the Walk to End Alzheimer’s can make a significant difference. Whether you join Team Eagle & Fein or create a team, your participation and donations are crucial. To join us or make a donation, visit our team’s website at ACT.ALZ.org/goto/EagleandFein or scan the QR code! Together, we can make a meaningful impact and move closer to a future without Alzheimer’s. Thank you for your support and commitment to this cause, which is so close to our hearts.
BE PART OF THE CHANGE
WALK WITH US TO RAISE AWARENESS
AND FUNDS FOR ALZHEIMER’S
– Brian Eagle
EagleandFein.com
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