How soon can I receive my ESOP payment?

[Guest Blowout]

I left my place of work, and I would like to know how soon I can receive my ESOP monies? I was 100% vested, and I am 38 years old. I was told that it will take a year or more before I receive it. Also am I not entitled to a Summary Plan Description? My last official day of employment was July 26th.

[Guest Paul McDonald]

By what you have been told, it sounds like your plan contains a requirement that distributions due to termination of employment can not be made until you have incurred what is known as a "break in service". You incur a break in service when you are not credited with more than 500 Hours of Service with your employer over a 12 month period (the plan year).

By your date of termination and assuming the plan is operated on a 1/1 to 12/31 basis, you most likely worked more than 500 hours in 1999. If you do not work for this employer in the year 2000, you incur your break in service next year. Depending on plan provisions and the value of your benefits, payment from the plan could be made no later than 60 days following the close of the 2000 plan year.

The plan can be even more restrictive so you should request a copy of the summary plan description to obtain the specifics regarding your former employers plan.

Good luck!

[Disco Stu]

I agree with Paul. You should definitely get a Summary Plan Description. Your employer is required to provide you with one. That will tell you what you need to know regarding timing of distributions.

It's possible that you may have to wait even longer than Paul speculated. It just depends on your particular plan. If the stock of your employer is not pubicly traded, it is probablt only valued once a year. Some ESOPs, to avoid a cash crunch for the company, make former employees wait 5 years before they can receive a distribution. If this what is referred to as a leveraged ESOP, you could have to wait even longer...until the ESOP loan is completly repaid.

Get a copy of the SPD. It will clear things up.

[Guest WAITING]

I left Lowe's over a year ago and have opted to cash in my shares of the stock, at first I was told I would recieve a check at the end of July, then at the end of Aug. When can I expect to get the check. I got the letter stating the amount that I would receive and when I called customer service they were no help and the bank has not received anything to send the check.