My father retired in 2005 due to cancer, and died in 2007. His company had argued his retirement date but now admit that he retired in December of 2005. With his death, we are still waiting for the company to payout on his ESOP...it is now 2008. What penalties can the company be faced with (if any) by waiting so long to pay his children. What kind of timeframe should we give the company before we seek legal action... Thank you, Chuck Nelson

The personal representative of his estate or his beneficiaries should ask the company for a copy of the ESOP plan document and summary plan description. The document will detail how and when benefits are payable to him. It sounds like he is fully vested due to retirement and or death. ESOP plans often delay distribution of benefits until after any stock purchase loans are repaid. Also larger balances are often paid in installments. The document will also describe a procedure for making a claim for benefits.

cnelson4780,

For legal authority regarding the timing of payout, in addition to the plan document provisions you may want to take a look at Treas Reg § 1.411(d)-4, Springate v Weighmasters Murphy Inc, 217 FSupp2d 1007 (CD Ca 2002); Saylor v Ret Comm, 2007 WL 2156409 (ED Ark 2007); Janeiro v. Urological Surgery Professional Association, 457 F.3d 130 (1st Cir 2006); Kuper v Iovenko, 66 F3d 1447 (6th Cir 1995); and Wulf v Quantum Chemical Corp, 26 F3d 1368 (6th Cir 1994).