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Installment payments miscounted, is correction necessary?


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An ESOP has a standard distribution policy, 5-year wait, payment thereafter in 5 equal installments (no acceleration below $5K, no segregation of stock accounts, fees fully paid by the Sponsor).  Last year the installments were incorrectly counted and participants who should have received their 4th installment (i.e. 50% of the available balance), their payment was calculated based upon a 3rd installment and received only 33% of the available balance.  While this may be an operational failure for not following the terms of the document, is there a correction to be made?  If future company stock gains are neutral or positive, I don't see that the participants were disadvantaged in any way that would produce a basis for a correction. 

What about a participant who was due their 5th installment(100%) but only received 50% of their available balance and now will need an additional distribution?  Are they harmed vs a comparison to the broader stock indexes? 

How should future installment amounts be calculated, does the missed amount all get made-up in the next payment, or are they calculated normally based on the remaining periods?

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By and large if the stock price has gone up and they are caught up by the next payment most ESOPs I see call it the day.

I guess a case could be made they could have made money in the market if they got 50% instead of 100% but I just don't see too many ESOPs worry about it.   If anyone here has seen an ESOP pay some kind of lost earnings I would like to hear about it myself.   

If the stock price goes down the story quickly changes.  You then pay them the better of the old or new price.  So if the price goes down you pay the higher old price.

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