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Employer Stock: Employer Stock Ownership Plans (ESOP)

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

Nancy Gates avatar
Written by Nancy Gates
Updated over 2 weeks ago

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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