eilano Posted June 26, 2002 Posted June 26, 2002 Employer sponsors an ESOP. Client wants to know if the ESOP can loan money to an unrelated 3rd party.
RLL Posted June 27, 2002 Posted June 27, 2002 Hi eilano --- If the unrelated 3rd party is not a "party in interest" under ERISA, such a loan may be made by the ESOP....but only if the ESOP remains invested "primarily" in employer stock and the applicable ERISA fiduciary rules (prudence, "solely in the interest" of participants, diversification of non-employer stock investments, etc.). are satisfied.
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