Indiana’s ESOP Initiative (IEI) was created in 2007 by the Treasurer of State's Office to promote and encourage the formation of new Employee Stock Ownership Plan (ESOP) companies by offering a "link deposit" program, which assists Indiana banks in funding ESOP transactions.
An ESOP is a qualified, defined contribution, employee benefit plan primarily designed to invest in the stock of the sponsoring employer.
An ESOP allows qualified employees, typically defined by a minimum number of hours worked per year, to become owners in the company they work for and secure a future benefit for their retirement.
ESOP companies are highly regulated under the federal Employee Retirement Income Securities Act. An ESOP company does have a number of expenses and complexities associated with administering them, but they offer employees an opportunity to share in the benefits of corporate ownership.
The ESOP "linked-deposit" program allows the Treasurer of State's Office to link its routine purchase of certificates of deposit (CDs) from Indiana's financial institutions to Hoosier companies needing capital to complete an ESOP transaction. The Treasurer of State's Office will purchase CDs at a slight reduced rate of interest, and the financial institution will agree to reduce the interest rate on the loan made to the company.
Additional information regarding ESOPs can be found at the following organizations:
Note: The IEI Initiative is currently being reviewed and evaluated by the Treasurer of State's Office so please contact the office regarding an interest in the program.