Frequently Asked Questions

Employee Ownership FAQs

Common questions about employee stock ownership plans (ESOPs), employee ownership trusts (EOTs), and other forms of employee ownership, from the basics to technical topics.

This FAQ is written primarily for business owners, managers, and advisors involved in setting up or running an employee ownership plan. If you're an employee at an ESOP company looking to understand your own benefits and rights, see our articles on Working at an ESOP Company and The Rights of ESOP Participants.

NCEO employee ownership FAQ hero (keyboard)

Can an ESOP participant choose not to take a distribution?

Section 411(a)(11) of the IRC prevents a plan from forcing a distribution to a plan participant prior to the time the participant attains the latter of normal retirement age or age 62 unless the account value is $7,000 or less. In general, if the distribution exceeds $7,000, a plan must provide that such benefit may not be distributed without the consent of the participant.

For more information, See Understanding ESOPs.

Link to this FAQ Topic: Distributions & Repurchase