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Employer Stock: Employer Stock Ownership Plans (ESOP)

This article describes how to enter ESOP (Employee Stock Ownership Plan)

Written by Nancy Gates

Qualified Employer Stock Ownership Plans

An ESOP (Employee Stock Ownership Plan) is a retirement plan (like a 401(k)) that invests primarily in company stock and gives employees ownership as a benefit.

Vested Shares

Navigate to to My Plan > Accounts and Assets

  • Add tax-deferred retirement account (like a 401(k)) and label it specifically as ESOP so you can distinguish it from your 401(k).

  • Enter the account balance

    • Enter your current vested balance (the portion you own).

    • If you also know your unvested balance, you could note that separately, but planning should usually focus on vested shares.

  • Select your Rate of Return

    • Since NQSOs are invested in your company stock, you can set your rate of return on either:

      • An assumed equity return rate, or

      • Actual performance of your company’s stock (update periodically).Enter your Current Balance

Future Shares

  • Add contributions

    • Unlike a 401(k), you don’t contribute your own salary. The company funds it.

      • Set contributions to $0 and update the balance annually OR

      • Use assumptions about company contributions if you know them and add as windfalls.

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