ESOP Stock

[Guest Karen Givens]

Can a money purchase plan be used to invest or repurchase a stock for an ESOP? What authority?

[RLL]

Hi Karen Givens ---

As a general rule, a money purchase pension plan may invest up to 10% of its assets in company stock under ERISA section 407(a), subject to compliance with the fiduciary rules of ERISA section 404(a).

However, a money purchase pension plan may be part of an ESOP, per IRC section 4975(e)(7) and ERISA section 407(d)(6); and such a money purchase plan could use up to 100% of its assets to purchase company stock, per ERISA section 407(B), subject to the fiduciary rules of ERISA section 404(a) and compliance with various "ESOP requirements" of ERISA and the IRC.

[Guest Karen Givens]

Thank you very much for your response. It's very much appreciated!