As National Employee Ownership Month comes to a close, PBA proudly reflects on the many benefits it’s incurred as an ESOP organization over these past few decades of service. We’d like to encourage others that are interested in this employee-focused retirement program by providing beneficial information on just how an ESOP works and whether or not it’s the right choice for your company.
This durable program offers stable, middle market services a great opportunity to incorporate a true team atmosphere within their organization, where everyone benefits from the continued success of the company. And where employees become owners of that company and therefore have a lot more to gain from its profitability.
If you’re curious as to how an ESOP works and what some of its benefits are, here’s a Top Ten list of Fun Facts about ESOP to get you started:
- ESOP’s were first recognized by the IRS in 1952 and 1974
- The term “Employee Stock Ownership Plan” was first defined by Federal legislation in the Employee Retirement Income Security Act of 1974
- After 7 Years of Service in an “S-Corporation” ESOP participants become fully vested and have access to shares allocated to their account
- The main roles within an ESOP are: Participants, Corporate Officers, Board of Directors and Trustees
- With an ESOP EVERYONE gets a piece of the “pie”
- An ESOP is a form of a retirement plan as defined by 4975(e) (7) of IRS codes
- According to the National Center for Employee Ownership (NCEO), in 2013 there were an estimated 11,000 ESOP companies with over 10 million employees
- After 10 years of service in the program, participants can withdraw up to 50% of the value of their account to diversify their investments
- In an ESOP, EMPLOYEES affect the company’s performance and stock value
- As an “S-Corporation” the company doesn’t pay federal taxes but rather acts as a pass-through, and individual owners in the ESOP don’t have to pay taxes, until withdrawing their investments
For more information on Peter Basso Associates, Inc., go to: http://www.peterbassoassociates.com/
To apply for an MEP engineering position at PBA, go to: http://www.peterbassoassociates.com/careers/application