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)

Is the ESOP administrative committee the same as the plan fiduciary or the plan trustee?

A plan fiduciary is the person or body that makes decisions affecting the plan. ESOPs have named fiduciaries, who can be anyone or any group (the board, the trustee, management, the ESOP administrative committee, all individual plan participants, or anyone else). Just because the plan names a fiduciary, however, does not mean that someone else cannot act as a fiduciary by making a decision for the operation of the plan. An ESOP administrative committee can both be named as a fiduciary and act as a fiduciary even if it is not so named. It can also serve as the plan trustee. The ESOP administrative committee, however, could play neither role if it does not make decisions, but simply renders advice to the fiduciary and/or trustee.

For more details, see ESOPs and Corporate Governance.

Link to this FAQ Topic: Governance, Fiduciaries & Compliance