12/15/99: At the National Center for Employee Ownership's Web site, Judith Kornfeld's "ESOP Repurchase Insights" column for December 1999 discusses "The Cash-Out Dilemma." Excerpt:
There are two reasons that companies want to delay
distributions. First, they want to discourage employees from leaving to
gain access to their account balances. While there do not seem to be
any statistics or formal studies on this issue, there is some anecdotal
evidence that, particularly in periods of low unemployment (i.e., when
it’s easy to get another job) and high stock prices, employees may
quit in order to cash out their ESOP balances. By making terminated
participants wait for a significant period of time, the theory is that
people will not have an incentive to leave just to get their hands on
their ESOP account balance.
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