Building Better Capitalism™

Information for Trustees

The duties imposed on ESOP Trustees are high, with their fiduciary obligations having been described as among the highest known to the law. ESOP Trustees are subject and legally bound to fiduciary standards outlined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). At Applied Economics, we fully understand the responsibilities undertaken by ESOP Trustees. Our credentialed and experienced staff provides ESOP Trustees with professional advice for a variety of purposes (e.g., ESOP administration, fairness opinions, ESOP installations).

ESOP Trustee Fiduciary Obligations

ERISA Requirements: ERISA requires ESOP Trustees manage and administer assets:

  1. Solely in the best interest of plan participants and beneficiaries;
  2. For the excusing purpose of providing benefits to plan participants and their beneficiaries and defraying reasonable expenses of administering the trust;
  3. With the care, skill, prudence and diligence that under the circumstances then prevailing, a prudent man acting in like capacity and familiar with such matters would use in conduct of an enterprise of a like character and with like aims; and
  4. In accordance with the plan document and the trust agreement to the extent that the plan document and trust agreement are consistent with ERISA. In the event of a conflict between the documents and ERISA, the ESOP trustee must act in a manner that is consistent with ERISA, regardless of the express terms of the documents and in accordance with applicable requirements of law.

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