ESOPs Gaining Popularity

A Georgetown University study shows that companies that offer employee stock ownership plans (ESOPs) have outperformed companies that do not during the recession. Thus, experts believe that more companies will soon offer ESOPs to their employees as retirement options.

Employees pay nothing for ESOPs, so it’s always smart to participate in an ESOP when it’s offered to you. If you participate in an ESOP, make sure you understand the fluctuating value of your account, how the benefit payments work, and the tax ramifications of your plan. Also, to reduce risk, you shouldn’t rely entirely on an ESOP to fund your retirement.

See Nancy Mann Jackson, All About Your Employee Stock Ownership Plan, Bankrate.com, Aug. 23, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.