Which retirement plan invests primarily in employer stock and grants shares that vest over time?

Which retirement plan invests primarily in employer stock and grants shares that vest over time?

• A. Employee Stock Ownership Plan
• B. Individual Approach
• C. Moral-Rights Approach
• D. Justice Approach

Answer: (A)

Investing primarily in employer stock with a vesting schedule is characteristic of an Employee Stock Ownership Plan. An ESOP is a retirement plan that allocates shares of the employer’s own stock into a trust for employees. As time passes, employees earn (vest) those shares, typically based on years of service, which links part of their retirement benefit to the company’s performance. This setup purposefully aligns employees’ interests with the company and provides a long-term ownership stake. The other options describe ethical or personal frameworks rather than a retirement plan. They do not represent plans that invest in employer stock or feature vesting of shares for employees.

Investing primarily in employer stock with a vesting schedule is characteristic of an Employee Stock Ownership Plan. An ESOP is a retirement plan that allocates shares of the employer’s own stock into a trust for employees. As time passes, employees earn (vest) those shares, typically based on years of service, which links part of their retirement benefit to the company’s performance. This setup purposefully aligns employees’ interests with the company and provides a long-term ownership stake.

The other options describe ethical or personal frameworks rather than a retirement plan. They do not represent plans that invest in employer stock or feature vesting of shares for employees.