OECD Responds to Comments on Company Stock in Pension Funds
Executive Director
On November 26, the Organization for Economic Cooperation and Development issued a preliminary assessment of the comments it received on its draft for comment of Core Principles of Private Pension Regulation. The original caused concern for employee ownership advocates by proposing the company stock be limited to 5% of a pension fund's holdings.
In response to comments from the ESOP Association, ESCA, Principal Financial Group, and the Beyster Institute, the next draft will include the following language: "These limitations should not apply in the case of pension funds specifically designed to invest in employer stock. To ensure sufficient diversification, either such funds should not be the sole type of pension plan made available to employees by the sponsor or such funds should reduce their investment in the plan sponsor's stock to a prudent level as retirement approaches."