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ESOP Operational Issues

How Many "Buckets" of Shares Does Your ESOP Have?

Nancy Dittmer

July 15, 2009

(Nancy Dittmer)As I mentioned when discussing safe harbor contributions made to an ESOP, those safe harbor contributions will likely need to be accounted for separately from other contribution sources. In fact, there are many circumstances that necessitate that the company stock (and the related other investment or cash account) should be maintained in its own separate "bucket." The following is not intended to be an all-inclusive list but does include many of the more significant reasons for separate tracking:

As you can see, there could be several different buckets of shares in any given ESOP, especially since the above is not a complete listing. It is important that your third party administrator understand all of the reasons for the separate tracking of shares.

From my perspective, all of these issues are just part of why working with ESOPs is so fun!

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