non-publicly traded stock

[gregburst]

Self-directed 401k is currently invested in a GAC with a popular insurance co.

For asset-protection purposes, owner/trustee would like to rollover assets from his IRA into the plan, which the document allows.

HOWEVER, what he wants to rollover into the 401k is non-publicly traded stock, in kind. And we can amend the plan to allow in-kind rollovers, available to all participants.

But since all employees must have the same investment opportunities, what must be offered in addition to the GAC? Just this stock, which is no longer for sale? Any stock? Self-directed brokerage accounts?

Of course we'd like to offer as little as possible, but we also want to keep the plan in compliance.

Thank you for any guidance.

[ESOP Guy]

Struictly speaking I think this can be done but it is full of possible problems:

1) The plan fiduciary has a duty to know the value of the assets so it would seem like someone is going to have the added expense of getting regular apprasials

2) There could be prohibited transaction issues

3) I assume this is a C corp. If it is a S corp the flow through income is subject to Unrealted Business Income Tax.

4) Technically if someone else in the plan wanted to roll in this kind of asset the plan would have to allow it.

5) I think one is going to draw the wrong kind of attention from the IRS that only the owner/trustee has done this. Not sure if it is worth the problems.

This sound a LITTLE like a ROBs you might want to check out the IRS' opinion of doing those... it isn't a very high opinion.