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Indiana Treasurer of State

Treasurer > Indiana's ESOP Initiative (IEI) > What is an ESOP? What is an ESOP?


An Employee Stock Ownership Plan (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.

ESOPs are highly regulated under the federal Employee Retirement Income Securities Act. ESOPs do 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.