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4 considerations when dealing with ESOP valuation issues during COVID-19

Back at the turn of the new year, few people imagined the havoc that the COVID-19 outbreak would cause during the first quarter of 2020. The broad…

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man looking at chalkboard with down arrow labeled economy and up arrow labeled COVID-19 (Photo: Shutterstock)

Back at the turn of the new year, few people imagined the havoc that the COVID-19 outbreak would cause during the first quarter of 2020. The broad financial outlook has worsened, and the valuations of many companies might be dramatically affected. Where ESOPs are concerned, this means that the 12/31/19 valuation—the value communicated in 12/31/19 participant statements and used to report the fair market value of employer securities on 2019 Form 5500—does not account for the public health crisis that has transpired since then. Here are four things to consider when confronting an issue such as this one.

Related: COVID-19 checklist of ESOP-related challenges

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