KSOP

AAA

DEFINITION of 'KSOP'

A qualified retirement plan that combines an employee's stock ownership plan (ESOP) with a 401(k). Under this type of retirement plan the company will match employee contributions with stock rather than cash. KSOPs benefit companies by reducing expenses that would arise by separately operating an ESOP and 401(k) retirement plans.

INVESTOPEDIA EXPLAINS 'KSOP'

Using a KSOP is a great option for companies when their shareholders are looking to sell their shares in the company. The KSOP instantly creates a market with sufficient liquidity that is needed for those shareholders wishing to sell their stake. KSOPs also provide added motivation to employees to ensure the profitability of the company. This is because the added profitability would directly enhance their retirement plans.

RELATED TERMS
  1. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  2. Employee Retirement Income Security ...

    The Employee Retirement Income Security Act of 1974 (ERISA) protects ...
  3. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  4. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  5. Economic Growth And Tax Relief ...

    A U.S. tax law, effective for tax years beginning 2002, that ...
  6. Roth 401(k)

    An employer-sponsored investment savings account that is funded ...
Related Articles
  1. 401(k) Plans For The Small Business ...
    Entrepreneurship

    401(k) Plans For The Small Business ...

  2. 6 Ways To Maximize The Value Of Your ...
    Retirement

    6 Ways To Maximize The Value Of Your ...

  3. A Closer Look At The Roth 401(k)
    Retirement

    A Closer Look At The Roth 401(k)

  4. I Was Intimidated By Investing, But ...
    Investing Basics

    I Was Intimidated By Investing, But ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center