Employee Benefits Law Blog | Michigan ESOPs ERISA Retirement Plan Attorneys | Foster Swift

Is an ESOP Right for Your Business? The Question Owners Should Ask First

Mindi M. Johnson — Mon, 15 Jun 2026 09:00:01 -0400

I was recently talking with a business owner about whether an ESOP made sense for his company, and he asked a great question: Am I smart or crazy to even consider this? Honestly, that’s exactly the right place to start.

The truth is, an ESOP can be a very smart move but it is definitely not the right move for every company. For the right business, it can be a powerful succession planning tool that rewards employees and preserves the company’s legacy. For the wrong business, it can create unnecessary complexity and frustration.

An ESOP may be worth a serious look if a business has these ...

How an ESOP Can Cut Your Tax Bill

Mindi M. Johnson — Tue, 02 Jun 2026 09:00:02 -0400

Owners usually ask this sooner or later: “Great, so what does an ESOP do for my taxes?” Depending on your entity type, the answer can be “a lot.” Employee Stock Ownership Plans (ESOPs) offer tax advantages that most third-party buyers simply can’t replicate.

1) If you’re a C-Corp: Sell at least 30% of your stock to an ESOP and you may be able to defer capital gains by reinvesting proceeds into certain qualified replacement securities. There are rules and timing requirements (it’s tax law), so get good legal counsel—but when structured correctly and held long term ...

Is an ESOP a Good Succession Plan? Key Rules and Benefits for Business Owners

Mindi M. Johnson — Mon, 18 May 2026 09:00:03 -0400

The short answer is YES! Here’s the plain‑English, straightforward version of how an ESOP works as a succession strategy:

1. The company sets up an ESOP trust.

2. That trust then buys some or all the owner’s stock.

3. Employees earn shares over time as a retirement benefit.

4. The company keeps operating - same management, same board.

5. Finally, instead of having to sell the business to a competitor, or shutting the doors completely, the owner ultimately sells to the people who helped build the business.

Sounds great, so what’s the catch? There is fine print and I wouldn’t be ...

‘You Made How Much?!’ When an ESOP Becomes a Strong Employee Motivational Tool

Mindi M. Johnson, Amanda J. Dernovshek, Julie LaVille Hamlet — Mon, 04 May 2026 09:00:04 -0400

You can probably picture it now: some employees are chatting and out of nowhere, someone blurts that out. Most employers would immediately tense up. Maybe HR gets a phone call, and everyone is now in damage control mode.

But that’s not what happened at one of my ESOP (Employee Stock Ownership Plan) companies. In fact, the company president later said it was one of the best things that could have happened and here’s why.

The comment came up when a retired employee stopped by to attend the company’s annual share release party. ESOP statements were handed out, and as the retiree looked ...

Department of Labor Proposes New Rule Expanding Access to Alternative Investments in 401(k) Plans

Julie LaVille Hamlet, Amanda J. Dernovshek, Mindi M. Johnson — Mon, 20 Apr 2026 09:00:05 -0400

The U.S. Department of Labor (DOL) has taken a significant step toward reshaping the investment landscape for defined contribution plans. In March 2026, the DOL released a proposed rule addressing the inclusion of alternative investments, such as private equity, real estate, private credit, and digital assets, in participant-directed retirement plans.

While the proposal does not require plan sponsors to add these investments, it signals a meaningful shift in how fiduciaries may evaluate and incorporate them under ERISA.

1. The Safe Harbor Framework

Under the proposal, a ...

When “Succession” Gets Personal: Talking About ESOPs

Mindi M. Johnson, Amanda J. Dernovshek, Julie LaVille Hamlet — Tue, 14 Apr 2026 09:00:06 -0400

When most business owners start talking about “succession,” it sounds like a financial term. But if we’re honest, it rarely feels that way, it feels more personal.

It feels like sitting at the kitchen table late at night, staring at numbers, and realizing this thing you built, isn’t just a business anymore. It’s the crew who showed up when you only had a used van and a couple pieces of old equipment. It’s the office manager who’s been there 30 years and knows more about the place than you do. It’s the technician who bought his first house because this company gave him steady ...

Retirement Plan Options for Public Employers

Amanda J. Dernovshek, Julie LaVille Hamlet, Mindi M. Johnson — Thu, 19 Mar 2026 09:00:07 -0400

State and local governmental employers in Michigan have several options when structuring retirement benefits for their workforce. Unlike private employers, governmental entities are generally not subject to ERISA and instead operate within a framework established primarily under the Internal Revenue Code, state law, and local ordinances or charters. As a result, public employers often have flexibility in plan design but must still consider administrative complexity, workforce objectives, and long-term financial commitments.

This article provides a high-level ...

EBSA Updates National Enforcement Priorities for FY 2026

Amanda J. Dernovshek, Julie LaVille Hamlet, Mindi M. Johnson — Fri, 27 Feb 2026 09:00:08 -0500

On January 15, 2026, the U.S. Department of Labor’s Employee Benefits Security Administration (“EBSA”) announced a major update to its national enforcement projects for fiscal year 2026. The changes are intended to focus enforcement resources on areas that pose the greatest risk to plan participants and beneficiaries, while reducing emphasis on minor or technical compliance issues.

According to the Department of Labor, this is the most significant revision to EBSA’s enforcement framework in recent years. The goal is to make investigations more efficient and ...

SECURE 2.0 Final Catch-Up Changes for Retirement Plans: What You Need to Know

Amanda J. Dernovshek, Julie LaVille Hamlet, Mindi M. Johnson, Olivia K. Reid — Mon, 09 Feb 2026 09:00:09 -0500

On September 16, 2025, the Internal Revenue Service released final rules implementing SECURE 2.0 changes to catch-up contributions under certain retirement plans, including 401(k) and 403(b) plans. Employers should be aware of two key changes.

1. Mandatory Roth Catch Up Contributions for High Earners

Employees whose FICA wages from the plan sponsor exceed the applicable indexed threshold during the prior calendar year ($150,000 for 2026) may only make catch-up contributions on a Roth basis. This is an employer level determination based solely on wages paid by the employer ...