Employee Trust

DEFINITION of 'Employee Trust'

A trust fund established by an employer on behalf of its employees in which the company is the grantor and its employees are the beneficiaries. The person responsible for managing the employee trust or assets of the trust is called the trustee.

BREAKING DOWN 'Employee Trust'

The most common forms of employee trusts are employee stock ownership plans (ESOP) and employee pension plans. With an ESOP, a company contributes to a trust fund and the trustee purchases stock on behalf of the employee/beneficiaries. Pension plans earmark funds for the employee for post-retirement income. In both cases, the employee is the beneficiary.

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RELATED FAQS
  1. What are the keys to setting up a trust fund?

    Setting up a trust to secure your assets for a beneficiary allows you to set the terms under which the beneficiaries are ... Read Answer >>
  2. How does the trust maker transfer funds into a revocable trust?

    Learn how revocable living trusts are established, how the trust maker transfers funds into the trust, and the advantages ... Read Answer >>
  3. Is an ESOP a qualified retirement plan?

    Acting as a qualified stock bonus plan as well as a form of a retirement plan, an ESOP has been a qualified retirement plan ... Read Answer >>
  4. What is the difference between a revocable trust and an irrevocable trust?

    Find out more about irrevocable trusts, revocable trusts and the main differences between them. Read Answer >>
  5. Can trust funds be activated before the grantor intended?

    Trust law gives the grantor specific rights over the release of assets and therefore it is not possible to change the stipulations ... Read Answer >>
  6. What does a merger or acquisition mean for the target company's employees?

    Learn about the likely impacts of a mergers & acquisition deal on the target company's employees, their benefits and adjusting ... Read Answer >>
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