I was terminated after 15 yrs. due to a personality conflict with new management who made certain i would not be eligible for unemployment. I am fully vested and the last summary of my esop was valued at approx. $41,000. However, my former employer tells me I am not eligible to receive my disbursement for a year. I am in danger of being forclosed upon and wondering if there was any way I could access even a partial disbursement to keep my home? I am now currently earning but it is not enough to catch up the past 4 months.
It depends whether your ESOP is a 401(k) or IRA, or like a more traditional ESOP, such as stock options, which vest (as you've described above). If you have a 401(k), there are certain rules that allow you to take a "distribution" from the 401(k) prior to 59 1/2 such as 1) Separation from Service that may allow you to take out money without being subject to a 10% penalty.
However, if your ESOP is a stock option plan, as you mention above, after your stock has "vested," usually due to a length of employment at the company, you can choose to "exercise" or buy the stock and sell it at your free will. Unless there are additional restrictions on your ability to exercise the stock, after stock is vested, and not subject to any other restriction, you may sell it and get the cash from the proceeds. Check with your boss to see which of the above situations is yours and ask if there are any additional restrictions if you have a stock option plan to sell it.
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The prior attorney offers sound advice. The only thing to add is that some plans provide "hardship distributions." The plan administrator may be being literal and did not volunteer this or any other distribution options you may have. Go back and ask and also request the summary plan description (SPD) to see if anything was missed.
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