QES - employer stock concentration levels change with market fluctuati

[fidu]

2 part qeustion

is 407 the correct ERISA section that covers 10% concentration levels at time of purchase of employer securities held in a plan trust fund.

what is required of a fiduciary/investment manager if the concentration levels go above 10% because of market fluctuations. must you sell the amount necessary to return to the 10% limit, what if selling in a down market would be imprudent?

[Guest earthy]

Yes, section 407(a)(2) of ERISA, 29 USCA sec. 1107(a)(2).

For most defined contribution plans, you do not want to exceed the 10% threshold unless such defined contribution plan is an "eligible individual account plan" as described in section 407(d)(3)(A) of ERISA.

earthy

[RLL]

It is an easy matter to simply amend a 401(k) plan to become an "eligible individual account plan" which is permitted to exceed the 10% limit under ERISA section 407.