Archive for the ‘401k’ Category

Final Regs on 401k Diversification

May 20, 2010

The Pension Protection Act of 2006 added rules requiring 401k plans (and certain others) to give participants an opportunity to change from an investment in stock of the company where they work to a diversified investment. Generally you have this right from day one for your own contributions to the plan, and the plan must permit this for company contributions when you’ve completed three years of service. Final regulations (PDF) have been issued providing details that may be of interest to plan designers and administrators. Changes from the proposed regulations are relatively minor but may be helpful, including a clarification that reinvestment of dividends on employer stock won’t create a violation of the rules.

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