Question

A stock bonus plan sponsored by publicly traded companies must allow employees to immediately diversify

a.) Both employee and employer contributions.
b.) They are not required to allow employees to diversify until retirement.
c.) Employer contributions
d.) Both pre-tax and after-tax employee contributions

Answer 1

A stock bonus plan must allow employees to diversify employer contributions within defined contribution plans such as 401(k)s and 403(b)s, which are tax deferred and portable.

Step-by-step explanation:

A stock bonus plan sponsored by publicly traded companies must allow employees to immediately diversify employer contributions. In these defined contribution plans, such as 401(k)s and 403(b)s, employees can often invest their retirement savings in various investment vehicles, with employer contributions being a part of the retirement account. These plans are tax deferred and portable, enabling workers to transfer their retirement account if they change employers. It is important to note that diversification requirements set by regulations focus on employer-contributed amounts.