3659. What diversification and vesting requirements apply to defined contribution plans that provide for acquisition of employer stock?polearyrcline202005-04-08T18:45:00Z2014-08-06T13:19:00Z2014-08-06T13:19:00Z11851055Hewlett-Packard Company821238142007-10-05T00:00:00ZTaxFactsDefaultArticleSite Map/Life Insurance/Income Taxation/Proceeds/Living/Disposition/Sale or Purchase of a Contract115140262-00-tf1.xml263.00;#2099;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1If the owner of a life insurance or endowment contract sells the contract, such as in a life settlement, what are the income tax consequences to the seller?74200.0000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-14T23:41:49Z3659. What diversification and vesting requirements apply to defined contribution plans that provide for acquisition of employer stock?In plan years beginning after December 31, 2006, a diversification requirement applies to certain defined contribution plans that hold publicly-traded employer securities (Q 3663).IRC Sec. 401(a)(35). A qualified defined contribution plan, other than a profit sharing plan, that is established by an employer whose stock is not readily tradable on an established market and that holds more than 10 percent of its assets in employer securities must provide that plan participants are entitled to exercise voting rights with respect to employer stock held by the plan with respect to approval of corporate mergers, consolidations, recapitalizations, reclassifications, liquidation, dissolution, sales of substantially all of the business’s assets, and similar transactions as provided in future regulations. Each participant must be given one vote with respect to an issue, and the trustee must vote the shares held by the plan in a proportion that takes into account the one participant/one vote requirement.IRC Secs. 401(a)(22), 409(e).