makes no representations as to accuracy of these The terms of a specific plan may have changed since the most recentlyĪvailable tax filing, and as a result, these descriptions and features may not beĬurrent. The information provided on this page is based upon the most recent Plan tax filingsĪvailable. Specific terms and options for the specific Plan in question. Review the applicable Summary Plan Description for a detailed description of the The Plan features and descriptions presented are provided only as examples andĭescriptions a particular type of plan. The Employer maintaining this Employee Stock Ownership Plan (ESOP) is an S corporation.This is a leveraged Employee Stock Ownership Plan (ESOP), where the ESOP acquires employer securities with borrowed money or other debt-financing techniques.Annual contributions to a stock bonus plan are limited to 25% of each employee's total compensation.
Stock Bonus Plans cannot discriminate toward highly compensated employees, such as executives. Contributions to a stock bonus plan are discretionary. This is a “Stock Bonus” Plan, where the employer contributes company stock to an employee’s account.
EMPLOYEE STOCK OWNERSHIP PLAN may include:
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It is critical that the Alternate Payee consult with a tax professional before making any transfers or withdrawals in order to be fully informed as to any potential tax consequences arising from either the nature or timing of the withdrawal or transfer. Alternatively, the Alternate Payee may choose to transfer the awarded funds to another tax deferred account of their choice - for example, to an IRA (Individual Retirement Account). This type of plan generally allows an Alternate Payee to receive an immediate lump sum distribution (or withdrawal) upon approval of a QDRO. If permitted by the terms of the plan, the Alternate Payee may have the opportunity to utilize investment options that are available for other plan participants. Once a QDRO is approved, the Plan Administrator will establish a separate account for the Alternate Payee. With a few exceptions, a QDRO containing a marital coverture formula for division of a defined contribution account will likely be rejected by the appropriate Plan Administrator. Most defined contribution plans do not permit an award to be expressed as "marital coverture formula", such as: "50% of the amount accrued from the date of marriage to the date of separation or divorce". In most cases, the Alternate Payee’s portion must be expressed as either a specific dollar amount, or as a percentage of the account. When dividing a defined contribution plan, the Alternate Payee is typically awarded a portion of the Participant's account balance as of a specific date (the "Valuation Date" or "Assignment Date"). A division of this type of account must be done by way of a Qualified Domestic Relations Order (QDRO).
Examples of this plan type are Employee Stock Ownership Plan (ESOP), Profit-Sharing Plans, 401(a), Savings Plans and 401(k). Regular contributions are then made by the Employer, the Participant, or both. Typically, a Company Sponsor (Employer) of this type of plan creates an account for every individual Participant. EMPLOYEE STOCK OWNERSHIP PLAN is a DEFINED CONTRIBUTION PLAN.
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