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How are shares allocated each year?

April 26, 2017allocated Shares year

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How are shares allocated each year?

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As ESOP debt is repaid, stock is released from the suspense account in the ESOP using one of two formulas selected at the time of the ESOP transaction by the ESOP trustee. For example, if the principal and interest release method were selected, and it were a level payment loan, then an equal number of shares would be released annually. Shares are normally allocated based solely on W2 compensation. However, it is possible to construct a formula that includes length of service, provided that it does not violate IRS anti-discrimination rules.