Blog Post
April 1, 2015

New Report on the Impact of S Corporation ESOPs

Loren Rodgers
Executive Director

A new analysis of the economic impact of S corporation ESOPs released yesterday examines trends in account balances, distributions to participants, total return, and the existence of other retirement plans. The study, performed by EY's Quantitative Economics and Statistics (QUEST) practice for the Employee-Owned S Corporations of America (ESCA), uses data from the Department of Labor and other sources. Its findings include:

  • S corporation ESOPs are growing by many measures. They represented 22% of ESOPs in 2002 and 42% in 2012. The number of plans, participants, and net assets also increased over that time.
  • The total return for participants in S ESOPs was 11.5% from 2002 to 2012, compared to 7.1% for the S&P Total Returns index. That return translates to $99,000 per participant.
  • S corporation ESOPs paid average distributions per participant that were 56% higher than 401(k) plans, totaling $30 billion from 2002 through 2012.
  • 65% of S corporation ESOP comapnies offer two retirement plans (e.g., one in addition to the ESOP), while 45% of establishments overall offer any retirement plans.

    • The average participant account balance is $78,000 for S ESOPs, which is 58% higher than the 2002 average, but below the pre-recession peak value.