The notice, which is not required before January 1, 2007, defines what is considered a publicly traded employer security as well as the individuals who have diversification rights. In addition, the notice provides rules for investments offered for diversification.
Permitted, as well as non-permitted, restrictions and conditions of divesture are spelled out for plan administrators and sets forth transition rules for existing limitations and grandfathered investments.The PPA requires that a defined contribution plan that holds publicly traded company stock permit participants to diversify the stock accounts after three years of service. The plans must give participants a notice of their diversification rights as well as educational material about the importance of diversification.
The guidance includes information provided by the Department of Labor concerning the date by which participants and beneficiaries must be notified of their new rights. There is also a model notice that can be used to satisfy the notification requirement.
The notice is here.