Employee Stock Ownership Plans (ESOPs)
An employee stock ownership plan (ESOP) is a retirement plan in which the company contributes its stock (or money to buy its stock) to the plan for the benefit of the company’s employees. The plan maintains an account for each employee participating in the plan. Shares of stock vest over time before an employee is entitled to them. With an ESOP, you never buy or hold the stock directly while still employed with the company. If an employee is terminated, retires, becomes disabled or dies, the plan will distribute the shares of stock in the employee’s account.
This type of plan should not be confused with employee stock options plans, which are not retirement plans. Instead, employee stock options plans give the employee the right to buy their company’s stock at a set price within a certain period of time.
The U.S. Department of Labor’s Employee Benefits Security Administration, not the Securities and Exchange Commission, oversees ESOPs. If you have a question about your ESOPs, please contact: :
U.S. Department of Labor
If you have a complaint about your plan, you can learn the procedures for filing a claim on the EBSA’s website. For help in finding a lawyer who specializes in pension matters, you can visit the website of the National Pension Lawyers Network. You can find information about pensions from the EBSA’s home page.
For more information about ESOPs, take a look at the website of The National Center for Employee Ownership.