ESOP with no ER stock?

[Lori Foresz]

Hi,

I can't find any regulations that require an ESOP to actually hold ER stock, although not holding stock in an ESOP seems strange. A company set up an ESOP in 2001, but hasn't yet bought stock so no participants actually hold stock in the ESOP. Currently, participants own shares of mutual funds pending the purchase of a large block of stock from the owner. Currently, the plan is building up cash through contributions and then plans to purchase the block without an acquisition loan. Do we need to be worried that for 3 years the ESOP has actually held no stock? I'm thinking no, but any thoughts would be greatly appreciated.

Thanks