Investing with Margin

[Guest tedmunice]

Are plan assets allowed to invest with a margin account? Assuming the answer is yes, what happens if there is a margin call and there are no other assets to cover it nor permissible additional contributions?

Side issue - can plan assets be pledged for collateral for a loan (note: not a loan from plan assets)

[ESOP Guy]

Margin loans MIGHT cause PT issues.

It also creates taxable income in the plan.

I forget what happens if you have an uncovered loss.

Here is a very old thread on it, but I don't think the law has changed since this discussion.

http://benefitslink.com/boards/lofiversion...php/t13275.html

My understanding is these issues are large enough it is why no one uses margin in plans