ESOP Trustee Services

In an ESOP transaction, owners of a company individually decide to sell some or all of their stock to the company’s employees through a to-be formed ESOP. The Employee Retirement Income Security Act of 1974 (ERISA) requires that an ESOP have a trustee that makes fiduciary decisions concerning assets of the ESOP.

Transaction Trustee

When an ESOP-sponsoring company appoints the Aegis team as trustee for a purchase transaction, Aegis is responsible for making the fiduciary decision to acquire the stock of that company from its owners. In so doing, Aegis is required to act in the best interests of the employees. As the legal owner of the stock, the Aegis team negotiates all the terms of the ESOP transaction, mindful that ERISA prohibits it from paying more than fair market value for the stock. Aegis also services as transaction trustee when a company decides to terminate the ESOP or when a third party buyer decides to acquire the ESOPs stock. In either event, Aegis’s fiduciary duty requires that the ESOP not sell its stock for less than fair market value. When Aegis serves as the transactional ESOP Trustee to purchase the stock or to sell the stock, Aegis’s experienced team of professionals follow a proven, rigorous internal process that surpasses its competitors and far exceeds the standards imposed by the Department of Labor, ensuring that Aegis fulfills its fiduciary duties to the employees.

Ongoing Trustee

At the conclusion of the ESOP purchase transaction, the Aegis team performs ongoing work on behalf of the ESOP. Several times a year, Aegis meets or confers with the management of the ESOP-sponsored company to monitor its operations and financial performance. At the end of each year, Aegis must value the sponsoring Company stock. Aegis’s experienced fiduciary committee and independent financial advisor review the company’s financial statements and other pertinent information to determine the appropriate value of the stock. As a result of the process, the employees will know the value of the stock allocated to their respective accounts.


Administration of a newly formed or mature ESOP can be a daunting task. ERISA requires strict adherence to its many rules. Our team of professionals helps plan sponsors comply with these rules.

Why Choose External ESOP Trustee Services?

We are experts.

External trustees often have the experience and knowledge of all the issues that arise in connection with an ESOP. The Aegis team has over 90 years of ERISA experience making us uniquely qualified to fulfill the fiduciary obligations of a trustee. Because Aegis's only business is providing trustee services, we have the time and resources to perform those services properly. A sponsoring company benefits from working with the many professionals of the Aegis team.

We are objective.

A core ERISA concept is that trustees must act exclusively for the benefit of ESOP participants. Internal trustees (a person or group of individuals who work for the Company) may have difficulty distinguishing their duties to their employer from their duties to participants, creating a potential conflict of interest. Using an external, independent fiduciary such as Aegis, assures that there are no conflicts of interest. The use of an external trustee means that an objective expert, steeped in ERISA knowledge, negotiates the transaction on behalf of plan participants and thereafter manages the plan assets.

We assume responsibility.

The Department of Labor oversees ESOP transactions and administration. Under ERISA, the trustee is individually liable for breaches of fiduciary duty relating to the ESOP or its assets. An external trustee is better equipped to comply with ERISA and defend its fiduciary decisions against potential legal action by the Department of Labor or class actions by participants.

We provide fiduciary insurance.

Unlike most internal trustees, external trustees frequently maintain fiduciary insurance to cover claims third parties make against them. Because a trustee is often indemnified by the company sponsor for all claims against the trustee involving the company’s ESOP (assuming the trustee has not committed a fiduciary breach under ERISA), the insurance the trustee maintains can be used to defray the company’s indemnification liability. Aegis maintains sufficient insurance to cover any losses associated with claims by third parties.

Looking for ESOP Trustee Services?

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