Early Distribution Due To Long-Term Disability

[Guest kappel98]

i've been on long-term disability for the past 6 years. i am in dire need of cash and was hoping to liquidate my ESOP which is worth about $65,000.00.

under the terms of the esop my employer will only distribute at early retirement, not long-term disability. do i have any recourse?

also, are there any companies that purchase esop's so i could get the money now and somehow assign it to them for payment at 55. i'm 44 now.

any advice would be greatly appreciated. thanks in advance.

[BeckyMiller]

Kappel - I am sorry that you find yourself in this unhappy situation.

As to your ESOP balance, you say you have been on long-term disability for 6 years. Has it been six years since you last worked for the company?

If yes, I would check back with the employer to see if you now have a right to a distribution. The ESOP distribution rules are VERY complicated. But, if your employer's plan was established after 1986 or acquired shares after 1986 and IF the debt associated with those shares has been paid off, you may now be eligible to commence distributions.

You need to find a copy of the Summary Plan Description. If you don't have a copy, send a written note to the employer requesting one. (You really need to do this in writing, sorry.)

If your company's plan includes only stock purchased before 1987, they can make you wait until retirement age to get a distribution, so it is quite possible that this won't help. But, it is worth checking into.

Good luck.

Unfortunately, you can't offer your ESOP balance as collateral on a loan or otherwise assign it to get cash now.

[Guest kappel98]

becky,

thank you so much for taking the time to reply and for your sympathy. my apologies for not responding sooner.

yes, i've been on long term disability with my employer since november 1996 (after 6 months of short-term)

i'm going to look into the "pre-1987" details. i had previously requested a copy of the summary plan which i still have. keep your fingers crossed that the particulars work in my favor. if not.....at least i have something to look forward to in a few years!

p.s. i know the question about using the esop as collaterol was a long-shot. but i had to ask. thanks again for your advice!

take care, mike