29 CFR 2550.407d-6 - Definition of the term

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There is 1 rule appearing in the Federal Register for 29 CFR Part 2550. View below or at eCFR (GPOAccess)
§ 2550.407d-6 Definition of the term “employee stock ownership plan”.
(a) In general—
(1) Type of plan. To be an “ESOP” (employee stock ownership plan), a plan described in section 407(d)(6)(A) of the Employee Retirement Income Security Act of 1974 (the Act) must meet the requirements of this section. See section 407(d)(6)(B).
(2) Designation as ESOP. To be an ESOP, a plan must be formally designated as such in the plan document.
(3) Retroactive amendment. A plan meets the requirements of this section as of the date that it is designated as an ESOP if it is amended retroactively to meet, and in fact does meet, such requirements at any of the following times:
(i) 12 months after the date on which the plan is designated as an ESOP;
(ii) 90 days after a determination letter is issued with respect to the qualification of the plan as an ESOP under this section, but only if the determination is requested by the date in paragraph (a)(3)(i) of this section; or
(iii) A later date approved by the Internal Revenue Service district director.
(4) Addition to other plan. An ESOP may form a portion of a plan the balance of which includes a qualified pension, profit-sharing, or stock bonus plan which is not an ESOP. A reference to an ESOP includes an ESOP that forms a portion of another plan.
(5) Conversion of existing plan to an ESOP. If an existing pension, profit-sharing, or stock bonus plan is converted into an ESOP, the requirements of section 404 of the Act, relating to fiduciary duties, and section 401(a) of the Internal Revenue Code (the Code), relating to requirements for plans established for the exclusive benefit of employees, apply to such conversion. A conversion may constitute a termination of an existing plan. For definition of a termination, see the regulations under section 411(d)(3) of the Code and section 4041(f) of the Act.
(6) Certain arrangements barred—
(i) Buy-sell agreements. An arrangement involving an ESOP that creates a put option must not provide for the issuance of put options other than as provided under § 2550.408b-3 (j), (k) and (l). Also, an ESOP must not otherwise obligate itself to acquire securities from a particular security holder at an indefinite time determined upon the happening of an event such as the death of the holder.
(b) Plan designed to invest primarily in qualifying employer securities. A plan constitutes an ESOP only if the plan specifically states that it is designed to invest primarily in qualifying employer securities. Thus, a stock bonus plan or a money purchase pension plan constituting an ESOP may invest part of its assets in other than qualifying employer securities. Such plan will be treated the same as other stock bonus plans or money purchase pension plans qualified under section 401(a) of the Code with respect to those investments.
(c) Regulations of the Secretary of the Treasury. A plan constitutes an ESOP for a plan year only if it meets such other requirements as the Secretary of the Treasury may prescribe by regulation under section 4975(e)(7) of the Code. (See 26 CFR 54.4975-11).
[42 FR 44388, Sept. 2, 1977]

Title 29 published on 2013-07-01.

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  • 2015-03-19; vol. 80 # 53 - Thursday, March 19, 2015
    1. 80 FR 14301 - Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans—Timing of Annual Disclosure
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      DEPARTMENT OF LABOR, Employee Benefits Security Administration
      Direct final rule.
      Effective date: This rule is effective June 17, 2015, without further action or notice, unless significant adverse comment is received by April 20, 2015. If significant adverse comment is received, the Employee Benefits Security Administration (EBSA) will publish a timely withdrawal of the rule in the Federal Register . Applicability date: The amendment is applicable to disclosures made on or after June 17, 2015.
      29 CFR Part 2550

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Title 29 published on 2013-07-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 29 CFR Part 2550 after this date.

  • 2015-06-18; vol. 80 # 117 - Thursday, June 18, 2015
    1. 80 FR 34869 - Hearing on Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice and Related Proposed Prohibited Transaction Exemptions
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      Notice of hearing and extension of comment period.
      The comment periods for the proposed rule and six proposed prohibited transaction exemptions published on April 20, 2015 (80 FR 21928, 21960, 22004, 22034, 22010, 22021, and 21989) have been extended, and comments on the proposals must be received on or before July 21, 2015. The hearing will be held on August 10, 11, and 12, and continuing through August 13, 2015 (if necessary) beginning each day at 9 a.m. EDT.
      29 CFR Parts 2509, 2510, and 2550