WASHINGTON – In an interview with Plan Sponsor’s Noah Zuss, ESCA President and CEO Stephanie Silverman discussed the “added benefits of having an ESOP” and highlighted a new analysis conducted by Ernst & Young (EY) as “another data point demonstrating the relative strength of ESOP ownership inside a privately held company.”
The EY study is “a very strong proof point that there are cultural and other benefits inside of an ESOP that continue to increase their value and therefore the value to participants and give that extra layer of retirement security that employees might not get elsewhere,” Silverman said. “Having an ESOP isn’t just about returns; it’s a cultural change, and it requires a lot of commitment from the company to the employee-owners.”
Silverman also emphasized an important advantage employee-owners have over their non-ESOP counterparts, noting that “almost all of the contributions to an ESOP account come from the company, virtually none come from employees themselves, so this is an added benefit provided by companies to employees as a way to enhance their retirement savings.” Notably, most ESOP companies also offer traditional retirement benefits, such as a 401(k).
Jerry Ripperger, national vice president of stock plan services consulting at Principal, echoed Silverman, calling ESOPs “a way to share wealth across all those that are generating wealth on behalf of the organization.” Ripperger added: “[Employee ownership] creates a line of sight and this ability to actually influence those results and reap the benefits.”
- To read full article at Plan Sponsor, CLICK HERE.
- To read the new study conducted by EY on behalf of ESCA, CLICK HERE.
- To learn more about the Employee-Owned S Corporations of America (ESCA) CLICK HERE.