I have a KSOP through my employer that I've invested 100% in company stock. I am now concerned that I'm not diversified and would like to move out of company stock and into mutual funds. Is this allowed with the funds I've contributed to the account?

By Denise Appleby AAA
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. What are the most common momentum oscillators used in options trading?

    Read about some of the most common technical momentum oscillators that options traders use, and learn why momentum is a critical ...
  2. How are Bollinger Bands® used in options trading?

    Use Bollinger Bands to identify volatility changes and place options trades at the right time; profit in bull or bear markets ...
  3. What's the safest way to invest in high-yielding dividend stocks?

    Learn about some of the most important safety factors that you need to consider before you invest in high-yielding dividend ...
  4. What is the minimum amount of money that I can invest in a mutual fund?

    Learn about investing in mutual funds even with a smaller initial investment; there are many funds available to investors ...
RELATED TERMS
  1. Civil Rights Act of 1964

    Landmark federal legislation that prohibits discrimination on ...
  2. Pre-Disability Earnings

    The amount of qualifying income that a disability insurance policyholder ...
  3. Residual Benefit

    A benefit provided by a disability insurance that provides the ...
  4. Successive Periods

    Periods of time that follow one another chronologically, and ...
  5. Concurrent Periods

    A period of time in which more than one injury or disability ...
  6. Protected Cell Company (PCC)

    A corporate structure in which a single legal entity is comprised ...

You May Also Like

Related Articles
  1. Investing Basics

    Enterprise Resource Planning System: ...

  2. Investing Basics

    Putting Your Retirement Eggs in Several ...

  3. Economics

    Profiting From China's Breakout: The ...

  4. Pimco has stabilized its Total Return fund, but its returns are still shaky and its sales load is still a fat one.
    Professionals

    A Look At Pimco's Total Return Fund ...

  5. Investing Basics

    How To Calculate Goodwill

Trading Center