A:

In order to be sure of your options, it's best to check the summary plan description (SPD) for the plan. The options may vary for different plans. This should include an explanation of the rules, including diversification options. If you have online access to your KSOP account, you may also have online access to your plan's SPD. If not, your plan administrator should be able to provide you with a copy.

The Pension Protection Act of 2006 (PPA) does require publicly traded companies to permit employees to liquidate employer stocks and reinvest in other assets at any time, providing:

  1. The stocks were purchased with the employee's salary deferral contributions, or
  2. The stocks were purchased with employer contributions, and were purchased after the employee completed three years of service with the employer.

For more on diversification, read The Importance Of Diversification.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS
  1. I'm having trouble getting my former employer to distribute my 401(k) plan balance ...

    Your employer or the plan administrator for the 401(k) plan should have provided you with a copy of the 401(k) plan's summary ... Read Answer >>
  2. What information does my employer have to give me regarding my 401(k) plan?

    Obtain 401(k) plan information like a summary plan description, summary annual report and annual statement of account information ... Read Answer >>
  3. My husband has a 401(k) account which is 100% vested with an $8,000 balance. We are ...

    Unfortunately, the conditions under which hardship withdrawals can be made from a qualified plan, including a 401(k) plan, ... Read Answer >>
Related Articles
  1. Personal Finance

    Job Hunting: Higher Pay vs. Better Benefits

    Focusing on pay when job hunting may be a mistake. Find out which benefits have the highest long-run payoff.
  2. Small Business

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  3. Retirement

    It’s Never Too Late to Contribute to Your 401(k)

    Find out why it is never the wrong time to start contributing to a 401(k), even in your late 30s, 40s or 50s; discover how to maximize your savings at any age.
  4. Retirement

    How Can You Make the Most of Your 401(k)?

    Make the most of your 401(k) plan by contributing early and taking advantage of employer matches.
  5. Retirement

    6 Problems With 401k Plans

    If you pay attention to the problems here, you will be able to avoid the negative effects and meet your retirement goals.
  6. Investing

    A Beginner's Guide to Investing in Company Stock Plans

    There are certain advantages to investing in your employer's stock but there are some potential drawbacks to be aware of.
  7. Retirement

    Retirement Tips for Government Workers

    Discover retirement tips for government workers such as what types of funds to choose, different types of plans, and at what age to retire.
  8. Retirement

    Self-Employed? Top Plans for Retirement Savings

    Here are 5 smart ways the self-employed can save for retirement. Some also work for your employees. But get financial advice before picking a strategy.
RELATED TERMS
  1. Summary Plan Description

    The summary plan description is a document that employers are ...
  2. KSOP

    A qualified retirement plan that combines an employee's stock ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  5. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  6. Corporate Pension Plan

    A formal arrangement between a company and its employees - or ...
Hot Definitions
  1. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  2. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  3. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  4. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  5. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  6. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
Trading Center