Hoard1 Posted May 17, 2000 Posted May 17, 2000 Employer is converting from balance fwd valation to daily valuation. They have several CD's with prepayment penalties that will not come due until 12 months from now. Are the CD's considered Securities for purposes of the prohibitive transaction rules? If not, could the employer purchase them @ FMV from the Plan so that the Plan could be fully invested at date of transfer.
Jon Chambers Posted May 24, 2000 Posted May 24, 2000 Yes, they are securities. DOL would likely issue a PTE on request, but that takes time and money. Why can't the daily valuation recordkeeper account for the CDs like a money market--fixed NAV and an interest accrual? I'd suggest this is more a recordkeeping weakness than anything else. ------------------ Jon C. Chambers Principal Schultz Collins Lawson Chambers, Inc. (415) 291-3004 Jon C. Chambers Schultz Collins Lawson Chambers, Inc. Investment Consultants
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