Employer Stock Fund

[Randy Watson]

Are there any unique issues that arise when a subsidiary offers parent company stock as an investment option in its 401(k)? I don't see anything inherently wrong with doing that. Thanks.

[JanetM]

No problem for sub to offer parent stock in plan. Question is - is a single stock a prudent investment if your nest egg is very small?

Am assuming are okay with the other issues of parent sub - control group, SLOB, QSLB, coverage.

[Randy Watson]

No problem for sub to offer parent stock in plan. Question is - is a single stock a prudent investment if your nest egg is very small?

Am assuming are okay with the other issues of parent sub - control group, SLOB, QSLB, coverage.

Yes, everything else is okay (controlled group, coverage etc.) and we recognize the fiduciary duties with offering this as a plan investment. I just don't want to get hit with something out of left field. Thanks.

[JanetM]

I can't think of any. I do suggest you set up formal process for black out periods of stock trades for insiders anytime you are preparing financials and just before you announce results. Expand the definition of insider to be anyone who has a clue about non public information.

[QDROphile]

Who is responsible for the securities law compliance?

[Randy Watson]

Who is responsible for the securities law compliance?

Parent.

[masteff]

Are there legitimate chances of the subsidiary being sold off at a future date and if so, will your current adopting amendment contain any clauses addressing future elimination of the stock as an investment option in such an event?

(I don't have an express opinion either way, just have been on the purchasing end of that and know too well that former company stock can carry a bit of an admin burden.)