Stay Focused on Running Your Business. We'll Help Manage Your ESOP.
An Employee Stock Ownership Plan (ESOP) creates meaningful benefits for business owners and employees, but it also comes with year-round administrative responsibilities. Annual allocations, compliance testing, participant statements, government filings, and distribution processing all require careful attention and documentation.
Based in Minneapolis and serving employee-owned companies nationwide, Boulay helps organizations manage these responsibilities. With hundreds of ESOP clients and more than 60 years of experience supporting employee-owned companies, our team provides participant accounting, regulatory reporting, testing, and filing support for ESOPs ranging from 25 to 4,000 participants.
What Is ESOP Administration?
ESOP administration covers the year-round work required to operate and maintain an Employee Stock Ownership Plan after implementation.
What's Included in Your Annual Service Package
Allocations
Compliance Testing
Form 5500
Participant Statements
Recordkeeping
Distributions
Why Employee-Owned Companies Outsource ESOP Administration
An ESOP is more than a retirement plan. It is a long-term ownership structure, and administrative work grows as the company grows. Participant counts rise, distributions become more frequent, and testing becomes more complex.
A dedicated ESOP administration team helps reduce administrative burden while providing the reporting, resources, and support needed to help manage the plan efficiently. Boulay currently averages a 2- to 4-week turnaround on participant statements once we receive the plan’s annual valuation, and we follow up on client questions within 24 hours.
ESOP Third-Party Administration Services
Many employee-owned companies work with an ESOP third-party administrator (TPA) instead of managing plan administration internally. As an ESOP TPA, Boulay provides the allocations, compliance testing, participant statements and Form 5500 filing support companies need each plan year.
Should You Work with an ESOP TPA?
Outside administration support is worth considering when:
- Your participant count is growing. More participants means more accounts to track, statements to produce and distributions to process.
- Testing takes more internal time each year. Top-heavy, Section 415, Section 404 and Section 410(b) testing all require accurate data and documentation.
- Distributions are becoming more frequent. Each one requires correct calculations, timing and recordkeeping.
- Your internal team has limited capacity. ESOP administration is year-round work, on top of everyone’s regular jobs.
- Rule changes are hard to keep up with. A TPA tracks regulatory updates as part of its core work.
- Leadership wants employee-ownership specialists. A dedicated ESOP team brings experience across many plans.
The more of these that apply, the more an outside TPA can help reduce your internal workload and compliance risk.
Our ESOP Administration Services
Boulay will:
- Prepare year-end accounting and allocation calculations
- Prepare participant summary annual reports
- Prepare Form 5500 and related schedules
- Produce annual participant statements
Boulay conducts:
- Top-heavy testing
- Section 415 limit testing
- Section 404 deduction testing
- Section 410(b) coverage testing
- Analysis of Section 1042 allocation limitations
- Fidelity bond reviews
Boulay’s team handles:
- Participant recordkeeping
- Annual account maintenance
- Termination tracking
- Benefit commencement administration
- Distribution processing
- Form 1099-R preparation when needed
- Participant communications and forms
Who We Serve
Boulay supports more than 300 employee-owned companies in 30 states, from newly formed ESOPs to plans with decades of history.
Newly Formed ESOPs
A new ESOP needs reliable processes from the first plan year. Boulay sets up participant recordkeeping, completes first-year compliance testing and coordinates with your trustee and valuation firm to keep your first allocation cycle on schedule.
Mature Employee-Owned Companies
As an ESOP matures, participant counts grow and administration becomes more complex. Boulay handles annual allocations, compliance testing, participant statements, Form 5500 preparation and distribution processing each plan year.
Industries We Serve
Our ESOP clients include companies in construction and construction-adjacent business, retail, manufacturing, wholesale distribution, professional services (including architecture and engineering) and healthcare.
Switching administrators doesn’t have to be disruptive. We manage the transition process, coordinate with your outgoing provider, and work to maintain continuity in your plan’s administration.
ESOP Administration Timeline
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Collection & Testing
- Year-end data collection
- Participant accounting updates
- Compliance testing
-
Allocations & Statements
- Annual allocations
- Participant statements
-
Filing & Distribution
- Form 5500 preparation and filing support
- Distribution processing
-
Planning & Review
- Year-end planning
- Regulatory review
- Preparation for the upcoming plan year
Why Companies Choose Boulay for ESOP Administration
Administration Backed by a Full ESOP Practice
Our administration team works alongside Boulay’s ESOP advisory, audit, and tax professionals. Many clients rely on Boulay for the initial transaction and then continue with third-party administration, sustainability and repurchase studies, audit, and tax services.
Leadership in the Employee Ownership Community
Dan Markowitz, who leads Boulay’s ESOP practice, serves on the board of directors and executive committee of the National Center for Employee Ownership (NCEO). The NCEO is a nonprofit research and membership organization that has provided information on employee ownership since 1981.
For your company, that means your administration team works closely with the people shaping ESOP research, education and best practices. We stay current on new developments and bring what we learn to your plan each year.
Our ESOP team also participates in and speaks at The ESOP Association, Employee-Owned S Corporations of America (ESCA) and the Minnesota Center for Employee Ownership.
One Team for ESOP and 401(k) Administration
For ESOP clients that also sponsor a 401(k) plan, Boulay provides 401(k) third-party administration through the same administration team.
Connected to Every Stage of Ownership
Boulay also provides ESOP advisory, feasibility studies, plan design, and repurchase obligation studies.
Meet the ESOP Administration Team
Related ESOP Services
ESOP Advisory Services
Explore Boulay's ESOP Advisory Services
ESOP Feasibility Studies
Learn About Feasibility Studies
ESOP Plan Design
Explore ESOP Plan Design Services
repurchase obligation & Sustainability Studies
Learn About Repurchase Obligation Studies
Common Questions About ESOP Administration
ESOP administration includes the participant accounting, reporting, testing, recordkeeping, and regulatory activities required to maintain an Employee Stock Ownership Plan.
An ESOP third-party administrator manages participant allocations, compliance testing, government filings, reporting, and recordkeeping for the plan.
Requirements vary by plan. We conduct top-heavy testing, Section 415 limit testing, Section 404 deduction testing, and Section 410(b) coverage testing based on each plan’s needs.
ESOPs typically keep participant records, allocation information, annual reports, testing results, filing documentation, and distribution records.
Fees typically depend on participant count, plan complexity, reporting requirements, and service needs. Contact Boulay for a customized proposal.
Administration is a year-round process. For calendar-year plans, work generally moves from year-end data collection and testing to allocations, participant statements, Form 5500 filing, and planning for the next plan year.
The company is still responsible for participant accounting, testing, reporting, recordkeeping, distributions, and government filings. Many organizations hire a specialized ESOP TPA to handle these responsibilities.
Companies often look for a new administrator when they experience service delays, growing plan complexity, changing regulatory needs, or want more specialized employee ownership expertise.
Latest Insights
Partner with Boulay’s Experienced Administration Team
Employee ownership comes with complex administrative work. Whether you’re evaluating your current provider or need long-term support for participant accounting, testing, reporting and regulatory filings, Boulay can help.
We’ll review your current process and identify opportunities to improve it.