What is this “ESOP” I’ve been hearing about? What does it mean?

ESOP stands for Employee Stock Ownership Program, and it’s a retirement benefit set up by our president and founder, Sue Burnett, in 2010 to reward long-serving staffing employees who contribute to the success of the company.  After meeting certain requirements, you become a stockholder in the company that you have worked so hard for!

What do I have to do to join or sign up for the ESOP?

The simple answer is – nothing!  Participation is automatic with no forms to fill out.

How much of my paycheck do I contribute each week to the ESOP?

Again, the happy answer is – nothing!  This benefit truly is a free gift to you from Burnett for helping us grow!

Okay, so what do I have to do to start getting this benefit?

The requirements are pretty simple.  For every calendar year that you work 1,000 hours on Burnett’s payroll, including at least 1 hour in the last quarter of the year (October thru December), you will gain a year of participation.  Burnett has established a “step-vesting” program.  It takes 6 years of participation (meeting the 1,000 hours per year requirement) to be 100% vested.  Under a step-vesting program, you earn a certain percentage per year of participation.  After 2 years, you are 20% vested, after 3 – 40%, after 4 – 60%, after 5 – 80%, and after 6 years, you are 100% vested!

What exactly does “vesting” mean?

Vesting means just means the right of an employee to receive the full benefit of the retirement plan amount in their account.  Once you’re 100% vested, the value of your account is locked in for you and you will be able to withdraw it when you qualify for a distribution.

Can I borrow any of this money either after I’m vested or before I’m 100% vested?

No, although the ESOP plan is a retirement plan it is not like a 401k that you can borrow against.  You’ll be notified when you’re eligible to either roll the amount in your plan over to another retirement account that you have (401k or IRA) or take the amount in cash.  You also always have the option to leave your money in the plan and let it grow until you’re 65 years old or decide to retire – the choice is yours!  You may also opt to only withdraw a portion of it or divide it between cash and rollover.

Can I get any money before I’m “fully vested?”

No, you can’t.  You’ll receive a certificate every year in the mail (you can also log in to the website to see the certificate at any time), and it will show your progress towards full vesting.  See the example below:

Stock Account
Years of Vesting Service Credit 1
Vested Amount $0.00
Vested Percentage 0%
Market Value on 12/26/20 $10,424.71

On my certificate, I see “forfeitures.” Are you taking money or stock away from me?

No, absolutely not.  If you’re currently in the program, when you get your certificate, you’ll see a line that says “forfeitures” and one that says “allocations.”  The allocations you see on the certificate did not come from you personally; they came from the already established ESOP fund. The forfeitures also are not yours personally; that is the amount of stock that was re-allocated to the fund from employees who discontinued participation.  See the example below:


Allocations = 6,091.9751
Forfeitures = 4,372.7414

If I take the money out when I’m eligible, will it cost me anything?

The appropriate answer to this question depends on when and how you take the distribution.


  1. If you roll the money over into another eligible retirement account (401k or IRA), the taxes will be deferred until you begin to withdraw money from that account after age 65. If you are under 65 years old when you roll over your distribution, you will be charged a 10% early withdrawal fee automatically by the IRS, which you’ll pay when you do your taxes.
  2. If you decide to take the money in cash (in the form of a physical check that would be sent to you), and you are 65 or older, you will not be charged a 10% fee but you will be responsible for paying the taxes on that amount which will be reported as income to the IRS. You’ll receive a 1099 form in the mail to assist you with this.
  3. If you are under 65 years old and choose to take the funds in the form of cash, you will be responsible for both the 10% early withdrawal fee and any taxes that are due to the IRS.

Is this a public stock? Where can I check the stock price every day?

Burnett Specialists is a privately-held company, so your ESOP stock/holdings are not publicly traded or listed on any stock exchange.  Our company’s share value is only assessed once a year, so there’s no need to check it all the time.  The value remains constant throughout the year until the next valuation period, which usually falls in June.