History of ESOPs
Who was the inventor of ESOPs?
Louis Kelso
How many ESOPs are there nationwide?
6,501
Which trusted advisor approves the share value each year?
Plan Trustee
What determines the number of shares an eligible participant will receive?
Eligible Compensation
When does a newly eligible participant enter the ESOP?
January 1st or July 1st after completion of the two (2) plan provisions for entry.
Which year was the ERISA established?
1974
How many ESOPs are 100% employee-owned?
Approximately 2,500
Which trusted advisor prepares the individual participant statements?
Third-Party Administrator (ESOP Partners)
What must an employee do to earn a year of vested service?
Work 1,000 hours
What is the age and participation within the ESOP Plan requirement for normal diversification?
Age 55 with 10 years of participation in the ESOP Plan.
What was the name of the first employee-owned company?
Peninsula Newspapers in Northern California
Which region of the country has the highest percentage of ESOPs? (East, Southeast, Midwest, Southwest, or West)
Midwest
Which trusted advisor is hired by the Plan Trustee?
Independent Appraiser
What are the two requirements that must be completed by all eligible employee-owners in order to receive an allocation of shares each year?
1. Be actively employed on the final day of the year (12/31). 2. Work at least 1,000 hours each Plan Year.
How many ESOP companies are in the state of Wisconsin?
There are 179 employee-owned companies throughout the state of Wisconsin.
What is the maximum deductible contribution level an employer can make towards an ESOP? (percentage)
25%
Which industry has the highest percentage of ESOPs?
Which trusted advisor drafts and finalizes all the legal documents?
ERISA Attorney
What are the two (2) requirements for eligibility?
1). Attainment of age 18; 2). 12 months of employment with 1,000 hours worked.
According to a Rutgers University study released on April 30th, what is the median ESOP balance for low to middle-class employee-owners?
$165,000
Name the senator that introduced the Employee Retirement Income Security Act (ERISA).
Russell Long
How many times greater is the retirement wealth for participants in an ESOP compared to participants at non-ESOP companies?
2.5 times greater
Who makes the decision to establish an ESOP Trust?
The Board of Directors.
What are the five triggers to a distribution?
1). Death, 2). Disability, 3). Termination, 4). Retirement, and 5). Diversification
Who appoints an ESOP trustee?
The Board of Directors