2024 ESOP Information
Do not send anything for PYE 2023 until statements are mailed on September 27, 2024.
ESOP Processing Timeline
Plan Year Ending 12/31/2023
Distribution paperwork saved here: L:\FORMS\DISTRIBU\DISTRIBUTION FORMS\NHC Forms
Pre-Retirement Eligibility Calculations
Year 1: 25% of balance
Participant will be eligible to diversify 25% of their full ESOP account balance as of the value at prior PYE 12/31
- The 25% is determined after the valuation is complete
Year 2-5: 25% of gains
Participant will be eligible to diversify 25% of the gains since the first year of diversification in their ESOP account.
- This calculation is a cumulative calculation, not a year-to-year calculation
- For example, say the partners account had negative returns, then positive returns the following year. If the total of the the two years is a negative amount, the partner will not be eligible to diversify, even though they have a positive return for the current year
- Year 2 = -$1,000 returns -> ineligible for diversification
- Year 3 = $600 returns -> ineligible for returns because the total return since the first year of distribution is -$400
Year 6: 50% of balance minus prior distributions
Participant will be eligible to diversify 50% of their full ESOP account balance as of the value at prior PYE minus any prior distributions
- The 50% is determined after the valuation is complete
In-Service and Terminated Eligibility
Use the spreadsheets to verify if you believe the participant is eligible for distribution this year (only during distribution window): NHC - Select the current year.
ESOP Pre-Retire % to Pay YYYY = this spreadsheet should have everyone qualified under for Pre-Retirement Eligibility
Installments are also on this spreadsheet, but installments cannot be elected during pre-retirement.
ESOP 1st Run YYYY = this spreadsheet should have everyone qualified under the In-service and Terminated Eligibility window. This will also include death accounts we are aware of. If there are new death accounts, they will need to be added by Alex T.
Returned Applications
Alex T will review the ppwk and log the dates on the ESOP spreadsheets.
For all items received via mail, Plan Info will email them to Alex T.
For these items, if we need more information Alex will use the Rec’d Distribution Paperwork ticket template, add the incomplete ppwk, and assign to a CSR to call.
For all items received any other way, Plan Info will use the ESOP Distributions: Documents Received from Plan Info scenario automaton to place them in the Pending ESOP Tickets ticket queue.
Tickets will enter the ticket queue as Open. If the documents are good to go, Alex will Close the ticket using the ESOP info rec'd scenario automation. If we need to follow up, Alex will add what’s needed in the ticket & change the status to Waiting in order for a CSR to call, email, or mail a letter.
Please remember that Alex needs to close these tickets to ensure the plan participants don’t miss out on this years distribution.
The CSR assigned will be reviewing the Pending ESOP Tickets ticket queue once daily to make these calls.
Don’t forget about the arrow to make clicking through the ticket queue quicker!
If the ticket has been closed, it should be logged in one of the spreadsheets mentioned above.
Incomplete Applications
Tickets sent to Waiting in the Pending ESOP Tickets ticket queue will continue to be contacted until we hear back or receive updated paperwork.
If we still do not have what's needed by the cutoff, we will mail them a packet including a letter, their incomplete ppwk, and an ESOP packet (without the letter). They will have until the cut off of the 2nd run to return the application. Otherwise, they must wait until next years' distribution, if applicable.
Overall Annual Process for ESOP
2023 Mailing Issues
During the main mailing this summer, there was an issue with the reporting/mailing list. There was a small number of active plan participants left out of the In-service group. New letters and applications were mailed to the people listed here ESOP First Run Issue Partners Added to Second Run.xlsx (sharepoint.com) on October 31, 2023. To review the letter, find the email thread: RE: ESOP First Run Issue
If someone calls that turned 65 this year, please double check the mailing list before telling them they missed a deadline. If they are on this list, send them the ESOP Application for Benefits. The people on the list are eligible for distribution during the 2nd Run. Dates are above.