Investments in Employer Stock
Newport Trust is a leading provider of independent fiduciary services to employee benefit plans containing large blocks of employer stock. Acting as an independent fiduciary, Newport Trust serves to protect the interests of participants and beneficiaries in situations where conflicts of interest may exist between the plan sponsor and the plan.
As an independent fiduciary, Newport Trust may assume responsibility for:
Defined Benefit Plans
- Managing company stock consistent with plan objectives
- Exercising proxy-voting responsibility
- Exercising fiduciary responsibility for prohibiting future plan investments in company stock, increasing the cash position of the company stock fund, or terminating the fund, in accordance with the plan and ERISA
- Managing a termination of the company stock fund as an investment option (a.k.a. sunset)
Contributions of employer stock to a defined benefit plan can help meet an employer’s funding obligations. Acting as an independent fiduciary, Newport Trust has been retained to determine if such contribution is appropriate under ERISA and in the plan’s interest. Newport Trust may also accept responsibility for the management and disposition of the employer stock contributed to the plan.
Employee Stock Ownership Plans (ESOPs)
Newport Trust is often retained to exercise independent fiduciary responsibilities or to serve as discretionary trustee for private company ESOPs. Our role also extends to a plan’s stock component in situations such as the sale of the company or a refinancing of an ESOP loan.
Other Independent Fiduciary Services
As a qualified professional asset manager, Newport Trust possesses the resources and personnel with substantive ERISA expertise to represent the interests of employee benefit plans in numerous contexts:
- Annuitization and pension de-risking strategies
- Prohibited transaction exemptions granted by the Department of Labor
- Independent audits of asset managers serving ERISA investors
- Affiliated service provider evaluations
- Plan investment mergers, restructurings, divestitures, and recapitalizations
- Negotiated sale, transfer or exchange of plan assets between affiliated parties
- Litigation settlements
- “Orphan” plan administration