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An employee stock ownership plan (ESOP) is a retirement plan in which an employer contributes its stock to the plan for the benefit of the company’s employees. This type of plan should not be confused with employee stock option plans, which give employees the right to buy their company’s stock at a set price after a certain period of time.

In Tennessee, as in other states, an Employee Stock Ownership Plan (ESOP) is a type of retirement plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are governed by federal law, specifically the Employee Retirement Income Security Act (ERISA) of 1974, and the Internal Revenue Code. These laws set forth the requirements for establishing, maintaining, and funding ESOPs, including eligibility, vesting, and distribution rules. The contributions made by the employer to the ESOP are tax-deductible, providing a tax benefit to the company. The ESOP holds the company stock in individual accounts for employees, and employees typically receive their shares when they leave the company or retire. It's important to distinguish ESOPs from employee stock option plans, which are incentive schemes that give employees the right to purchase company stock at a future date at a predetermined price, and are not retirement plans.

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Investments

ESOPs

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ESOPs

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