ESOP FAQs

An Employee Stock Ownership Plan (ESOP) is a tax‑advantaged retirement plan funded entirely by your employer. Instead of contributing your own money, your company contributes shares of company stock to an account set up for you as an added employee benefit..

No. ESOPs are funded only by employer contributions. You cannot contribute your own money or purchase stock through your ESOP account.

Yes. ESOPs can be offered in addition to a 401(k) Plan, or within a 401(k) Plan. When employers merge an ESOP with a 401(k) plan it forms a kSOP. While you can’t contribute to an ESOP, you can still contribute to your company’s 401(k) plan or a kSOP, helping you build a stronger retirement balance.

Enrollment is easy and automatic. Once you meet your plan’s eligibility requirements, BPAS and your employer will automatically create your ESOP account for you. You don’t need to enroll, but it’s important to access your account to ensure that your contact information is accurate and to designate beneficiaries.

After you meet eligibility requirements, your employer will make contributions to your ESOP based on your plan’s formula. Contributions are typically made annually and are often based on factors such as your compensation and years of service.

The value of your ESOP account depends on your company’s stock value:

• For publicly traded stock, values may be updated daily.
• For privately held companies, stock is typically valued once per year.

Your plan documents will explain how and when your company stock is valued.

You may be eligible to withdraw your vested balance if you:

• retire,
• leave employment, or
• reach age 59½, depending on your plan rules.
• If you pass away, your ESOP account is paid to your designated beneficiaries.

Keep in mind that some ESOPs only permit the sale of stock shares during specific trading windows. Be sure to review when this window occurs to ensure that you have sold shares before requesting a withdrawal.

It depends on the distribution type:
• Rolling funds into another workplace retirement plan, IRA, or annuity generally defers taxes at that time.
• Taking a cash distribution paid directly to you is typically subject to income tax. If you are under the age of 59 1/2, you may also be subject to an early withdrawal penalty.

Yes, it’s important to have beneficiaries designated to your ESOP. You can update your beneficiaries at any time by logging into your account and visiting the My Profile section. Review your beneficiaries regularly, especially after life events like marriage, divorce, or a birth.

To access your ESOP, navigate to the Account Login drop-down and select Retirement Plan.

You won’t have access to your account until you receive your welcome letter. Follow the detailed instructions within the letter to get started.

Statements are mailed to your home address and are also available electronically in your Participant Portal. Be sure to notify your employer if your mailing address changes.

Since your ESOP value is tied to company performance, your everyday efforts matter. You can help by:

• increasing productivity or sales,
• helping control costs,
• following safety guidelines, and
• supporting customer satisfaction.

When the company succeeds, your ESOP account can grow.