An employee stock ownership plan (ESOP) is an IRC section 401(a) qualified defined contribution plan that is a stock bonus plan or a stock bonus/money purchase plan. An ESOP must be designed to invest primarily in qualifying employer securities as defined by
- ESOPs –Anti-Cutback Relief (2013)
Notice 2013-17 offers relief for certain ESOP amendments that eliminate a distribution option to meet new diversification requirements.
- Determination Letter Issues for ESOPs phone forum (October 28, 2011) (transcript PDF) (handout PDF)
- S corporation stock held by an ESOP - deductions
An ESOP-owned S corporation cannot deduct retirement plan contributions for ESOP participants.
- ESOPs – Definition of readily tradeable employer securities (March 2011)
Notice 2011-19 defines when employer securities held by an ESOP are “readily tradeable”
- Response to Technical Assistance Request #5 (October 8, 2010) PDF
Discusses qualification issues presented by plan provisions concerning the mandatory transfer of employer securities to and from participant plan accounts designed to prevent the occurrence of a nonallocation year (within the meaning of IRC section 409(p)(3)).
- Response to Technical Assistance Request #4 (February 23, 2010) PDF
Discusses qualification issues presented by plan provisions concerning the mandatory transfer of employer securities to and from participant plan accounts.
- Response to Technical Assistance Request #3 (Dec. 9, 2009) PDF
Discusses the required timing and substance of IRC section 409(p) amendments.
- Response to Technical Assistance Request #2 (November 3, 2009) PDF
Discusses plan language defining “qualified participant” under IRC section 401(a)(28)(B)(iii).
- Response to Technical Assistance Request #1 (November 3, 2009) PDF
Concludes that ESOP provisions providing for a distribution of stock is subject to immediate, mandatory resale are consistent with IRC section 409(h).