Long term disability and ESOP distribution

[Guest barebtm1]

i am 42, permanently disabled and receiving long term disability benefits from both my employer and social security administration.

i have a vested employee stock ownership plan i would like to receive a distribution from. my employer indicates i would have to be at least 55 and retired. isn't LTD recognized as "retired" regarding ESOP.....as it is with other pension benefits?

[RLL]

cute name, barebtm1 !!

Section 409(o)(1)(A)(i) of the Internal Revenue Code requires that an ESOP provide for benefit distributions to commence by the end of the plan year following the year in which there is separation from service by reason of "disability." This rule applies to ESOP benefits attributable to stock acquired by the ESOP after 1986 and requires payments of vested benefits over a period not exceeding five years.

It certainly is possible that your "employee stock ownership plan" may not be an ESOP which is subject to this requirement, but there's no reason for you to accept what you've been told without further inquiry.

I recommend that you read the required "summary plan description," which should outline your rights to benefits. Also, you could request a copy of the formal plan documents and check out the specific benefit distribution rules applicable to your situation.

[Guest barebtm1]

dear RLL,

thank you for your relply....very informative. i'm in the process now of confirming with both my employer and the pension and welfare administration if i am entitled to a distribution. i'll let you know what happens.