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Are there any circumstances under which an employer can offer individual stocks as an investment choice to Plan Participants ?

I'm not talking about company stock, which I'm aware many publicly-traded corporations do offer employees either as an investment option or as the employer-match portion of their retirement plans.

My wacky hypothesis is this:
A privately-held corporation currently offers its employees a selection of five investment choices: a money market fund; two stock mutual funds; one bond fund; and a balanced fund.

The company now wishes to offer its employees the option of adding an individual stock to their retirement choices.

Said company has determined that Microsoft (just as an example) is a great company and wishes to make MSFT a selection choice in its 401(k) or Profit Sharing Plan.

Is this legal to do? If so, how would a company go about purchasing this stock on behalf of those employees who selected that option?

And one final question:

Is there a minimum number of investment choices a 401(k) Plan must offer, or could it (however bizarre it may seem) offer just one mutual fund such as, Fidelity Magellan along with say, a money market fund and call it a Plan?

Even though I *think* I know the answers to these questions, I can't adequately explain the "why" as well as I'd like, so would appreciate more expert input.


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