Valuation Date for Stock Contributions

[Jon Chambers]

A company makes an annual 401(k) match in the form of publicly traded company stock. Currently, they value the stock based on the average market price on the day preceding the date of transfer to the trust. They are wondering what latitude they have to use other valuation dates--e.g., date that the Board approved the contribution, year end valuation date, etc.--and whether these valuation dates need to be reflected in the Plan document or other materials.

I'd be interested in any thoughts or experience out there!

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[Guest John E McGrady III]

Under the 404 dedution limits and the 415 benefit limitations, contributions of property must be valued as of the date of contribution. See e.g., Treas. Reg. Section 1.415-6(B)(4). Thus, to the extent you did change your valuation date under the plan with respect to the match, you would still have to track the valuation seperately for purposes of 404 and 415. I hope this is helpful