A common practice of many plan sponsors prior to the Pension Protection Act of 2006 (PPA) was to require participants to remain invested in employer stock. Some plan sponsors required a holding period for a specified time interval in employer stock (for instance, a two-year holding period before trading).
The PPA requires that plan sponsors with calendar plan years beginning on or after January 1, 2007, provide a written notice on or before December 1, 2006, to participants informing them of their right to diversify.
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