Should you pop for an ESOP? – Rough economy has brought bright side to these arrangements
Abstract: The recent recession has caused many companies to have lower profits, which in turn means lower values on company shares. But this has made employee stock ownership plans (ESOPs) more affordable and more popular. This article takes a look at what’s entailed in these retirement plans: the difference between leveraged and unleveraged ESOPs, the different tax treatments for S and C corporations, and distribution rules. A sidebar discusses the importance of having an appraisal by a third-party valuator for ESOP purposes.