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US pensions review could lead to change in regulation

A review of pensions and corporate disclosure in the US, ordered by US president George W Bush, is likely to lead to changes in the regulation of self-investments.

Currently, US retirement plans are not allowed to hold more than 10% of assets in employer stocks, but there is an exception for 401K plans and others that existed before the introduction of the Employee Retirement Security Act (ERISA) in 1974. This means that contributions are frequently invested in the sponsoring company stock as the practice is seen as giving participants an increased interest in the firm's success.

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