What must be true for participants regarding withdrawals from an ESOP?

The requirement that applies to participants regarding withdrawals from an Employee Stock Ownership Plan (ESOP) is that mandatory diversification options are available for employees over the age of 55 who have enough years of service. This rule is in place to help mitigate the risks associated with having too much of an employee's retirement savings tied up in company stock, thereby encouraging a more diversified investment portfolio as employees near retirement.

When employees reach the age of 55, they have the option to diversify their holdings by rolling over a portion of their ESOP account into other retirement accounts or investments. This is significant because it helps ensure that employees are not overly reliant on the performance of their company's stock, especially as they approach retirement—a time when they need to secure steady sources of income.

This requirement aims to protect employees' retirement savings by providing them with opportunities to reduce risk and diversify their investments, ultimately enhancing their financial security in retirement.