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Is your ESOP terminating or modifying? PENSCO is here to help.

With 30 years of experience as an alternative asset custodian, PENSCO is uniquely qualified to provide a customized solution that allows your employees to hold their private stock and maintain tax advantages with an IRA if you terminate or modify your ESOP plan.  Once a decision has been made to terminate or modify the plan, PENSCO relationship managers will start working with ESOP plan sponsors, company executives, legal advisors and financial advisors to educate ESOP participants on how to continue to hold private stock in a tax-advantaged account.

Protecting Tax Benefits for ESOP Participants

Maintaining tax benefits for plan participants is of paramount importance and this can be done whether a plan is terminated or modified. 

  • ESOP Plan Termination
    • When a plan is terminated, employees can use a rollover to either move shares or cash distributed from the sale of ESOP shares into a self-directed IRA. Employees continue to hold their private shares or invest available cash as they choose, including into alternative assets such as real estate or notes, while maintaining tax-deferred status. 
  • ESOP Plan Modification
    • If continuing to hold their private shares in a tax-advantaged account is an option, PENSCO will help employees transfer their shares from the ESOP directly into a self-directed IRA. This allows plan participants to maintain their tax-deferred status and continue to hold their private stock.*

A dedicated PENSCO relationship manager will help ESOP participants establish their self-directed IRA to hold their shares or cash being distributed from the ESOP plan. As a leading alternative asset custodian with 30 years of experience in the custody of alternative assets in IRAs, PENSCO possesses deep knowledge of the IRS rules and regulations that govern holding alternative assets IRAs.

Choosing PENSCO to help your ESOP participants means you can count on:

  • Assistance for participants who want to continue to hold private stock in a tax-advantaged account
  • Unparalleled knowledge of the rules and regulations that govern owning alternatives in IRAs
  • Dedicated support and assistance from an experienced Relationship Manager
  • Expertise to seamlessly handle individual or bulk transfers from ESOPs
  • Award-winning technology to expedite the account opening process
  • Flexible pricing based on your unique situation
  • Unlike many broker-dealers, PENSCO offers its clients the ability to hold alternative assets such as private equity, real estate, hedge funds, startups, and other non-exchange traded assets in an IRA.

To learn more about PENSCO's ESOP solutions, call us at (855) 453-4960 or complete the form below.

* Three conditions must apply: the ESOP company is a C corporation at the time of the sale; the ESOP owns at least 30% of the company after the sale; the sale proceeds are re-invested in the U.S. domestic investments within a 15-month window.