10% Limitation

[Luis Miguel]

Under ERISA 407, it states that a plan cannot acquire employer securities if immediately after the acquisition, the value of the shares exceeds 10% of plan assets. My question is:

if no further shares are purchased, yet the value of the shares in future years goes up beyond 10% of total plan assets, does the plan have to sell off shares to get back down to 10%? I don't believe it has to but others say yes.

[david rigby]

...does the plan have to sell off shares to get back down to 10%?

Maybe. See ERISA 407(a)(3) and 407©.

[Kirk Maldonado]

I seem to recall that the DOL covered that exact point in its regulations.

[Luis Miguel]

yes, the regulations did cover this, but as i understand it, these regulations were officially removed.