Upon termination of your employment with Bayview or its affiliates, ownership of your account will be distributed to you in that manner at that time determined according to the ESOP’s distribution policy. In determining the value of your account, Bayview Stock’s shares are immediately valued at their fair market value as of March 31st. Under Applicable Laws and ESOP Plans since the Bayview Articles of Incorporation, as amended, Bayview shares are not owned by Bayview or ESOP employees. However, he is entitled to claim his ESOP distribution of Bayview shares. ESOP benefits are paid in the form of cash or Bayview stock. If a distribution is made in Bayview Shares, the shares are subject to the following: Mandatory and immediate buyback by Bayview at current cash value and payment shares can be paid in one lump sum or in substantially equal installments up to 5 years. The ESOP is currently processing distributions from vested benefits in cash for eligible participants.
If the value of your vested benefit exceeds $5,000, no distribution can be made to you before you reach Normal Retirement Age (i.e., the later of your 65th birthday or the fifth anniversary of the date on which you commenced participation in the ESOP) without your written consent. If the value of your vested benefit exceeds $1,000 but does not exceed $5,000, the Trustee will be required to automatically rollover any distribution made to you to an individual retirement account established for your benefit, unless you request to receive such funds directly. If the value of your vested benefit does not exceed $1,000, the Trustee will process the distribution to you directly (less any applicable income tax withholding) unless you elect otherwise. Generally, the distribution of your vested benefits under the ESOP must commence by the earliest to occur of the following:
- If your employment terminates after you meet eligibility criteria for Normal Retirement, or because of your Disability or death, distribution will commence no later than the Plan Year following the Plan Year in which your Normal Retirement, death or Disability occurred.
- If your employment terminates for another reason, distribution will commence no later than the sixth Plan Year following the Plan Year in which your employment terminates (unless you elect to delay your distribution or you are reemployed by Bayview or its Affiliates).
- Within 60 days from plan year grant date which of the following dates is the same as or following the most recent date: (a) date: When you reach normal retirement age. (b) his 10th anniversary: The date you started participating in the ESOP. (c) yours: Termination of employment with Bayview or its affiliates.
- Distribution must begin no later than his April 1st after the distribution period ends. If you are a “5% owner”, the calendar year in which you reach 70-1/2; if you are not a 5% Owner, the latter here’s what happens: (i) reach the age of 70-1/2 years; or (ii) retire.
Subject to applicable law and ESOP planning documents, customer’s distribution may be one of the following methods:
- Distribution of a Participant’s Capital Accumulation in a single lump sum; or
- Distribution of a Participant’s Capital Accumulation in substantially equal, annual installments over a period not exceeding five years (provided that the period over which installments may be distributed may be extended an additional year (up to an additional five years) for each $230,000 or fraction thereof by which his Capital Accumulation exceeds $1,150,000 (as adjusted
after the Plan Year ending on March 31, 2021, for increases in the cost of living pursuant to Section 409(o)(2) of the Code)).
- Any combination of the foregoing.
Currently, ESOP distributions are processed in six (6) annual, substantially equal installments over a period not to exceed five (5) years; provided, however, that if a Participant’s vested balance as of March 31st coinciding with or following the Participant’s date of termination is $10,000.00 or less, the Participant’s vested balance under the ESOP will be processed in one lump sum payment. In certain circumstances, you (or your surviving spouse or Alternate Payee) may elect to transfer your ESOP lump sum or installment distribution (as applicable) directly to an individual retirement account or annuity (“IRA”) or another employer’s qualified retirement plan which accepts such transfers, at the time a distribution is payable. Non-spousal beneficiaries are limited to direct rollovers to only an inherited IRA. If your employment with Bayview or one of its Affiliates terminates due to your Normal Retirement or Disability, and you subsequently are re-employment, you will continue to be eligible to receive distributions of your vested benefit under the ESOP as described above.
There are definitely various options when it comes to obtaining your money from the ESOP after retirement, it is just a matter of staying informed and choosing the option that works best for you and your family.