Definition
An employer sponsored plan, which combines the features and benefits of an ESOP and a 401(k) plan. Employer contributions to a KSOP are usually made with employer stock options.
Referring Cite
IRC. § 401(k)(1), IRC § 404(k); IRC § 404(a)(9)
Additional Helpful Information
- The nondiscrimination testing rules that apply to a 401(k) plan also apply to a KSOP
- The eligibility requirements for qualified plans apply to KSOP
- An ESOP can be an entire plan or it can be a component of a larger defined contribution
plan. An ESOP may provide for different types of contributions. For example, an ESOP may
include a qualified cash or deferred arrangement that permits employees to make elective
deferrals. Such an ESOP design is sometimes referred to as a “KSOP
