Treasury stock in a 401(k)

[PMC]

Daily valued 401(k) plan. Employer wants to include treasury stock as one of the investments. Understand the PPA requirements but what other issues might you have encountered with including treasury stock as an investment?

[Jim Chad]

Is "Employer stock" another way to say what you mean?

[Guest mjb]

Treasury stock is stock that has been authorized but not been issued by the company to investors. In order for the stock to be issued, an investor has to pay the company for the stock. How can treasury stock be issued to a plan as a plan asset?

[TLGeer]

Treasury stock is treated as an employer contribution if no money passes to the employer. If the employer gets money, it is a sale of the stock.

Treasury stock is employer securities, and you have to do full compliance. Note especially that if deferrals can be invested in the employer stock there are SEC registration and insider trading requirements or state blue sky law rules. You need to bring a securities lawyer into the process.

Assuring compliance will cost more money.

Tom Geer