Financial Organization Mergers and Acquisitions · Acquisition, or Spin-Off Plan Merger or...
Transcript of Financial Organization Mergers and Acquisitions · Acquisition, or Spin-Off Plan Merger or...
Financial Organization Mergers and Acquisitions
Learning Objectives
Discuss key business functions to be reviewed prior to a mergerComplete an amendment mailingReview post merger tax reporting
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Definition of a Merger
Introduction
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Business Merger, Acquisition, or Spin-Off
Plan Merger or Spin-Off
Business Transactions Stock (or Other Equity Interest) Business Transactions2 Types
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Mergers and Acquisitions2 or more businesses combine
Parent-subsidiary controlled group
Spin-Offs1 business entity becomes 2 or more
Business TransactionsAsset Business Transactions(Property of a business is sold or purchased)
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AcquisitionsAll or part of a company’s
assets are acquired
Planning for a Merger
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What questions would you need to ask before you start the merger process?
Mergers and Acquisitions
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Different procedures for handling transactions
Need to preserve data for proper reporting
Significant effect on IRA programs
Different options available to clients
Regulatory Approvals
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NCUA/FDIC Members/Shareholders
State law
Notifications
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IRA Owner
Benefits of merger or acquisition
Change in trustee, custodian, issuer
Changes in contact information
Analyze Documentation Procedures
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Review document storage
procedures
Determine forms provider
Create a plan for missing information
Obtain missing signatures
Amendments
Past Reporting and Transactions
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Required corrections Common mistakes
Evaluate New Staff
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Conduct procedural training
Determine staff needed to
perform key tasks
Conduct needed IRA training
Evaluate knowledge of new staff
Determine new roles
Review Processing System
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Define ability to move data from one
system to other system
Plan for rollout and any additional programming
Determine features of each system that
are desirable
After the Merger
Notify Account Owners
• Changes in contact information• Website or portal• Change in trustee, custodian, issuer• Benefits of merger or acquisition• Actions to take
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Amend IRA Documents
Law changes
New trustee or custodian
Document differences
Gather missing information
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Amendment Methods
IRA Owner’s Signature Negative Consent
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Signature
?Amendment Procedures
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Deadline Last known address
Cover letter Required documentation
Owner named 1 of 6 children as beneficiary on previous custodian’s form, which successor accepted against policy
Accepted Beneficiary Election is Ruled ValidIn re: Estate of McNeight, Court of Appeals of Michigan
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Days before death, told children his intent was to share assets equally
Designation on form is valid because the successor custodian accepted the form
Complete IRS Reporting
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Standard Reporting• Both organizations file• Report based on transaction date• Acquired organization reports BEFORE• Acquiring organization reports AFTER
Combined Reporting• Acquiring organization reports ALL• Must meet certain IRS requirements • Can choose forms to report as combined• Acquiring organization must aggregate
information• File statement with IRS per Rev. Proc. 99-50
Merger Activity
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Place the Merger Steps in Order
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Receive approvals of outside entities
Notify clients of changes
Perform due diligence review on acquired organization’s IRA program
Evaluate IRA policies and procedures
Review IRA documents
Review past reporting for compliance concerns
Evaluate acquired staff
Determine processing system to survive
Amend documents as needed
Complete IRA reporting for year of merger10
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Questions?
Thank you for attending
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Financial Organization Mergers and Acquisitions
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