PyraStar's customized "Know Obligation" Repurchase Liability Study is designed specifically to provide an affordable, practical, and simple solution to small to mid-size companies (both C- and S-Corporations) in volatile economic times to address several emerging issues.
"Know Obligation" Repurchase Liability Study includes traditional elements of repurchase liability studies such as growth and benefit projections but focuses on the plan fiduciary responsibilities of KNOWING, planning, and funding ESOP repurchase obligation.
Specific purposes of the study include:
- To document the decision-making process of corporate and plan fiduciaries for competing uses of cash in an ESOP company as it relates to growth and future benefit payments (repurchase obligation).
- To identify and quantify both probable and possible sources of repurchase obligation for planning purposes.
- To provide a meaningful discussion regarding different funding strategy and investment vehicles.
- To establish an ongoing process of monitoring short, middle, and long-term plan funding to intentionally address fiduciary due-diligence by the plan sponsor (an emerging ESOP fiduciary issue). PyraStar administration clients receive complimentary monitoring of the variances of "KNOW OBLIGATION" projections and actual plan performance to help maintain Fiduciary due diligence and keep an important planning tool updated and meaningful.
- To assess alternative uses of cash reserves and the effect of various investment methods on the fair market value of the company stock (an emerging ESOP valuation issue).