ESOP and Rollovers
Two questions on ESOPs:
1. Are they subject to the regular RMD rules?
2. If all of the assets in an ESOP are permissible contributions, would there be any time where that ESOP would not be rollover eligible?
Two questions on ESOPs:
1. Are they subject to the regular RMD rules?
2. If all of the assets in an ESOP are permissible contributions, would there be any time where that ESOP would not be rollover eligible?
Permalink Submitted by mk foss on Fri, 2012-07-20 16:29
An ESOP is a definied contribution plan and is subject to the same rules as other similar plans such as a 401k. That means RMDs at the required beginning date etc.
Rollovers are permitted by the Internal Revenue Code, the plan could have some restrictionss For example if the employer stock is closely held it might be possible that only cash could be rolled over and the stock in the account would have to be redeemed.
Permalink Submitted by Alanna Crawford on Fri, 2012-07-20 16:36
Thank you very much!
Permalink Submitted by Rey Cruz on Wed, 2015-03-04 20:44
Do ESOPs count as “Plans” where if the employee is 55 he can take a distribution and not have to pay the 10% penalty only income taxes?
Permalink Submitted by Alan - IRA critic on Wed, 2015-03-04 21:44
Yes, if the employee separates from service in the year he reaches 55 or later, distributions from the ESOP are penalty free.