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.