Quailfying Employer Real Property

[amcorson]

I am doing some research on the following scenario: Company sponsors self-directed 401(k) plan and wants to set up an LLC to hold land that would be leased by franchisees. 401(k) Participants would be given the option to invest in LLC through self directed 401k. The issues I am looking into:

1. Does the land meet the requirements of qualified employer real property as defined in ERISA 407? It meets the geographical dispersment requirement and no commissions would be charged on the transcations. Since it is in a participant directed account, it is exempt from the "10% of assets" rule. Does the fact that it is held in an LLC come into play?

2. Company wants to impose a $15,000 minimum investement in LLC option. My understanding of the nondiscrimination rules require the plan to test the number of participants with $15,000 or more, based on the first part of the average benefits test. If it passes this, the option is nondiscriminatory.

Any other issues I need to research further? Thanks.