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I'm trying to wrap my head around this and would love some input. We have a 401(k) plan with qualified employer securities. The plan sponsor is a C-Corporation and is privately-held. The owner formed a new business in 2022 under a separate LLC that they own 100% and hired employees in early-2022. Since the C-Corporation is in a controlled group with the newly-formed LLC, the LLC was added as a participating employer of the plan effective 1/1/2023, recognizing prior service with the LLC. We expect there to be employees that meet the plan's eligibility requirements in July 2023. My question is -- how does the qualified employer securities investment option work with the employees of the LLC? Would the LLC employees simply be treated the same as the employees of the C-Corporation and have the option to purchase stock in the C-Corporation? Or, is there some other piece that I'm missing. ....such as, since the C-Corporation is technically not their employer, would the option to purchase employer securities in the C-Corporation be unavailable? Although, if this is the case, I would presume this would run into benefits, rights and features issues.

To avoid the independent qualified public auditor opinion requirement for the Form 5500, does the fidelity bond need to cover 100% of an employer's non-publicly traded stock held within the plan, or can such stock be considered as a qualifying plan asset?

I'm dealing with a multiple employer 401(k) plan (Employer A and Employer B) that contains Employer A non-publicly traded securities. Employer A has been purchased, and the new owner would like to limit the future purchase of Employer A stock to Employer A employee-participants. Employer B employee-participants would be permitted to sell any Employer A stock they have, but would not be able to select additional Employer A shares as an investment option in their 401(k) accounts (but Employer A employee-participants would be able to so elect). Assuming there are no HCE discrimination issues, would this be permissible? More simply, can a multiple employer 401(k) plan offer different investment options to different participants based on the employer of the given participant? We believe this is permissible, but I have been unable to find any authority explicitly stating so (right now all I can say is that none of the qualified plan requirements prohibit it). Does anyone know of an authority that explicitly addresses this? I can't even find anything about offering differing investment options within a single employer. Anything that indicates employers have flexibility to offer investment options as they see fit would be useful. Additionally, Employer A does not plan to offer any additional Employer A shares up for sale for any participants in the plan, and thus the only way to invest in additional shares would be if another participant chose to sell, and the only way to sell shares currently held would be if another participant chose to buy. Participants would be given the opportunity to place buy or sell orders once a year. Within this structure, Employer A would like to prioritize retirees and those close to retirement for satisfaction of sell orders (in the event there are more sell orders than buy orders), as they are ostensibly more in need of the liquidity. If there are more buy orders than sell orders, the sell orders would be distributed pro rata amongst those who placed buy orders. Is this arrangement permissible? And, as above, is there any authority that addresses such an arrangement, or a comparable or related arrangement? Thanks!