Excess Employer Securities in DB Plan

[Guest mingblue]

The acceptable percentage of employer securities in a DB plan is 10% - if the plan reaches 20% and you advise them of the 15% excise tax, are your consulting duties complete ? in other words is there any requirement under the minimum funding rules that would compel you to remove the excess from plan assets ?

[rcline46]

The acceptable amount of employer securities in a DB plan is 10% WHEN PURCHASED. What they become later is not relevant. Maybe a 'prudent man' issue but that is all.

[david rigby]

Be careful. If this includes ER stock with an automatic dividend reinvestment, that will constitute an impermissible increase. (At least, it did several years ago when this happened to one of our clients.)

[Guest mingblue]

If the proportion of employer securities exceeds 10%, is it a reportable event ?