M&A in your future? You need an Employee Benefits Audit.

The recent trend of mergers and acquisition of closely held businesses is on the minds of so many business owners these days. Virtually unlimited sources of Venture Capital coupled with inflation, rising overhead expenses, and the great resignation has made pursuing exit strategies increasingly attractive.

A thorough employee benefit review is critical for every company, but particularly those that are considering entering and preparing for any M&A activity.

Here’s a quick hit list of issues that should be reviewed and addressed:

1. Have you benchmarked your Employee Benefits package against companies of similar size in your industry? Is your benefits package competitive enough to attract and retain talent?
2. Are your retirement plan programs in full compliance with ERISA and fiduciary responsibilities including filings of all required tax reporting? Do you know who the fiduciary on your plan is? If you don’t know, its likely you — the business owner
3. Do you have key people coverages that can assure prospective purchasers that their most important people are protected and insured?
4. Review any and all TOP HAT or executive compensation programs, and be sure to address any unfunded liabilities or promises like bonus agreements.
5. Prepare any desired severance and retention bonuses and consider equity/phantom stock agreements that could help assure continuation for key people.
6. Be sure your company is fully compliant on ACA reporting as well as affordability of benefits for firms 50 and up.

Review all HR documents, time keeping systems, PTO , OT, etc and ensure the are all in compliance and up to date

Have an outside advisor review your HR and audit your processes to be sure that you do not have any potential exposures.

This really is just the tip of the iceberg. There are so many key details that need to be addressed but this list is a great start to helping your company prepare for the best outcome in any potential transactions.

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If you’re interested in an Employee Benefits Audit, we can help with that. Learn more here.