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 >>
  4. I am 61 years old and would like to contribute to my employer's 401(k) plan. Is there ...

    There is no age limit. As long as you are still employed by the company that sponsors the 401(k) plan, you may participate ... 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. Managing Wealth

    How To Manage Your Company Stock

    If you have company stock, it can be hard to know what to do with it. Here's what you should know.
  4. 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.
  5. Personal Finance

    What You Need to Know About Your Stock Options

    Know these things and talk to a professional to get the most out of your employee stock options.
  6. 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.
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. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  6. Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE

    A retirement plan that may be established by employers, including ...
Hot Definitions
  1. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  2. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  3. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  4. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  6. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
Trading Center