ESOP
Employee Stock Ownership Plan
ESOP Lunch & Learn
Absolute Group’s ESOP Communication Committee hosted a Lunch and Learn with Baker Group’s ESOP Committee. If you weren’t able to join, please watch the video.
Understand your ESOP statement.
Use this simplified explanation of the statement to understand your investment.
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Near the top, you’ll see your personal information, including your years of vested service. This determines your vested percentage, which affects how much of your account balance you can take with you after you leave the company.
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What’s in your account as of the end of the last plan year – cash and/or shares.
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What was added to your account from the company’s contribution and matching contribution (based on your 401(k) Plan deferrals).
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Earnings on cash in your account for the plan year.
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If you leave the company and aren’t fully vested, the unvested part of your account is lost (forefited). This shows the part of your account that was lost. If you’re an employee, this shows your portion of the additional shares and/or cash from the accounts of those who left before being fully vested.
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Cash in your account is used to purchase shares. This shows the exchange of cash for shares.
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Cash in your account is used to buy back shares after people leave, or if you elect diversification, shares are exchanged for the cash value. If you’re no longer an employee, the shares in your account may be exchanged for the cash value if your account is segregated or if you receive a distribution.
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What’s in your account at the end of the plan year – cash and/or shares.
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The company may make two types of contributions to your account. Each type has it’s own vesting schedule. This section shows the total value, vested percentage and vested value for each type.
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The per share value of the company stock as of the end of the plan year, as determined by the ESOP trustee with the help of an independent appraiser (valuation firm).
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What your account is worth at the end of the plan year.
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This is the current value of your account that you could take with you if you leave – based on your vested percentage. The amount you’ll be paid will be based on the current value of your account (stock value and/or cash value) when you take a distribution.
To view your ESOP account information online, use Principal on the web or download their app.
First time users, click here for instructions.
2023 Share Price
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ESOP Basics
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An ESOP is an Employee Stock Ownership Plan that provides you with ownership of shares of the company. In a nutshell, it’s a retirement plan similar to a 401(k) but you are given “stock” in Absolute Group. Oh, and it costs you NOTHING!
Typically a company has one owner who takes all the profit, or is a publicly traded company which you can purchase from a stock exchange.
With our ESOP, the employees own 100% of the company meaning the profits can be shared between all eligible employees.
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You must:
• be at least 21 years of age
• have worked at least 1,000 hours
• have been an employee for at least one year.For those who were hired between January 1st and June 30th, you will automatically become part of the ESOP effective July 1st of the following year and those of you who were hired between July 1st and December 31st, you will automatically become part of the ESOP effective January 1st of the following year.
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NOTHING! Being an employee owner, you pay nothing for your shares.
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To maximize the number of shares you are allocated annually through the ESOP we encourage you to contribute, if affordable, a minimum of 5% into your 401(k). Absolute Group matches your contributions at a 100% up to 3%, but when you contribute 5% Absolute Group will match 4%.
When you contribute to your 401(k) at the maximum matching level of 5% it does help to maximize the number of shares you receive verses if you had not contributed to the 401(k).
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Remember, this is a retirement plan. It’s another bucket for you to have saved up for when you retire or can no longer work.
Vesting means the percentage of your account you actually “own.” Absolute Group uses the following vesting schedule for years of credited service:
< 2 years = 0%
2 years = 20%
3 years = 40%
4 years = 60%
5 years = 80%
≥ 6 years = 100%You also become fully vested when you reach normal retirement age, become disabled, or die while employed at Absolute Group.
Full details of the ESOP Summary Plan Description can be reviewed here.
Growth
It is important to understand the value the ESOP can bring to your financial planning. These charts illustrate the increase in the share price as well as how the growth rate compares to the stock market. It should be noted that past performance is not indicative of future results. It is important to diversify your retirement assets, and Absolute Group provides a great opportunity with the ESOP. All you have to do is show up to work everyday and contribute to the success of the company.