ABRC-ESOP

One of the most confusing areas regarding ESOPs are the rules regarding Fiduciary Responsibility. In fact, this is one of the most common questions I receive during the conferences I speak at.

An ERISA Fiduciary (trustee) Must Act:

• Solely in the interests of the ESOP plan participants
  
  
• With care, skill and prudence that a prudent person familiar with such matters would use under the same circumstances (the prudent man rule)
  
  
• In accordance with the terms of the plan documents insofar as they are consistent with ERISA law.
  
  

However, Board actions that affect the Company's operation and assets (even in a 100% ESOP-owned company are not subject to the above standards.