Contribution of treasury stock

[lexi]

An employer has a 401(k)/ESOP plan and wants to contribute treasury stock to satisfy its 401(k) match (and pension sharing contribution).

I found PWBA Interpretive Bulletin 94-3, which makes a distinction between required and discretionary contributions. Other than that, I am not aware of any provision or regulation that would prevent an ER from contributing treasury stock.

Has anyone else run across this situation?

[BeckyMiller]

An in-kind contribution to a retirement plan is a fairly common occurrence. The contribution of stock to a 401(k), profit sharing, stock bonus or ESOP is probably the most common form of the in-kind contribution. You just need to make sure it is done in a manner consistent with your plan agreement and is properly valued. The controversy in the early 90's related to whether or not the event was a prohibited transaction - transfer of property to satisfy an obligation. This is one of those areas where you have to rely on the fact that there is nothing that prohibits an in-kind contribution and take it from there. (This contasts, for example, with the IRA rules where the law specifically prohibits in-kind contributions.)