I have class B shares in Dunn-Edwards Paint ESOP. I left the company in December of 2008 and since then have watched my money dwindle. I have asked to be paid out but they said I am not eligable to be paid out yet. What is the law about ESOP payouts? I feel like I will never get paid and if I do by the time I receive payment I will have nothing left.
There are a number of rules around ESOP payouts, and like other retirement plans, much depends on your age, reason for termination (retirement, disability, etc), etc. Like other retirement plans, companies can customize certain aspects of their plan, such as vesting, within certain parameters. Did the person you spoke to let you know when you would be eligible?
The first thing to do would be to request a copy of the Summary Plan Description document. This will layou tthe basic rules of your plan. You can request this from HR or the retirement group in the company.
Overall, here are some of the basic rules:
Retirement, death or disability- payments required to begin during the "plan year" (accounting period for the ESOP) following the year in which retirement, death or disability. Payments to be paid at least annually, and must be complete no later than five years after the first payment. An extension in the payout period (not when it must start) is allowed if your balance exceeds a certain amount. Termination or other reason- Payouts can wait until the 6th plan year after the year you left the company. An exception is if the plan was created prior to 1987. In this case, ESOP payouts do not have to begin until you reach retirement age. Also, the plan description will describe retirement age.
There are rules for distributions while still employed with the company. These are mainly to allow for diversification and dividends.
One general resource is http://www.nceo.org/articles/esop-participant-distribution-rules