New Analysis Addresses How ESOPs Stack Up as Retirement Plans
Executive Director
The NCEO has completed a detailed comparison of how ESOPs fare as retirement plans compared to other defined contribution plans. The analysis includes both a detailed narrative and tabular comparison.
The analysis shows that ESOP participants typically fare better than participants in other defined contribution plans. Company contribution rates are 50% to 100% higher, ESOP companies are somewhat more likely to offer secondary retirement plans than other companies are to offer any plan, ESOP participants are less likely to be laid off, account balances have 2.2 times the retirement assets as employees in other retirement plans, and ESOPs are much more likely to provide meaningful benefits to younger and lower-income employees. In addition, rates of return in ESOP companies are higher than in 401(k) plans and less volatile. We encourage people to send this link to anyone who may be interested.