1) Does the new rule that allows a participant to diversify employer stock only apply to publicly traded stock?

2) Does this apply to an ESOP with only employer contributions?

3) Do the same rules apply to a 401k with employer stock?

4) Does anyone have a link to the final regulation as it relates to this issue?

Thank you very much for any help.

The rule is 401(a)(35). It applies to any DC plan holding publicly traded employer securities. It does not apply to ESOPs which only have employer contributions. A 401(k) with publicly traded stock would need to comply with the rules. The proposed regulations came out in January 1.401(a)(35)-1 found at 73 Fed Register 421 1/3/2008. The proposed rules are more flexible in many respects than the previously issued IRS Notice 2006-107