---
title: "Test an acquisition of employer securities or employer real property against the statutory limit"
url: "https://ailawframework.com/practice/superannuation/test-a-fund-s-in-house-assets-against-the-5-per-cent-limit/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A27-PU20261022-8-US"
practice_area: "Superannuation"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Test an acquisition of employer securities or employer real property against the statutory limit

> From the acquisition papers and the asset list, record the security or real property being acquired, whether the plan calls it an employer security or employer real property, the fair market values used, and whether…

Canonical page: https://ailawframework.com/practice/superannuation/test-a-fund-s-in-house-assets-against-the-5-per-cent-limit/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Superannuation](https://ailawframework.com/practice/superannuation.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the acquisition papers and the asset list, record the security or real property being acquired, whether the plan calls it an employer security or employer real property, the fair market values used, and whether the plan document describes the plan as an eligible individual account plan. Do not decide that the acquisition is inside the limit. |
| What the lawyer must review | The lawyer decides whether 29 USC 1107 allows the acquisition. Subsection (a)(1) bars a plan from acquiring or holding an employer security that is not a qualifying employer security, or employer real property that is not qualifying employer real property. Subsection (a)(2) bars an acquisition of a qualifying employer security or qualifying employer real property if, immediately afterwards, the aggregate fair market value of employer securities and employer real property held by the plan exceeds 10 percent of the fair market value of the plan's assets. Subsection (b)(1) says subsection (a) does not apply to an acquisition or holding of qualifying employer securities or qualifying employer real property by an eligible individual account plan. The lawyer reads the rest of subsection (b), including the rule that can treat required investment of applicable elective deferrals as a separate plan that is not an eligible individual account plan, before treating a 401(k) or profit-sharing plan as outside the limit. The regulation, 29 CFR 2550.407a-2, states the 10 percent test by reference to qualifying employer securities and qualifying employer real property, defines what counts as an acquisition, and reduces total plan assets for stated acquisition indebtedness. The regulation's examples are illustrations, not this plan's figures. This is not a 5 percent in-house asset test. |
| Written for | United States |
| Applies to | [Test a fund's in-house assets against the 5 per cent limit](https://ailawframework.com/practice/superannuation/test-a-fund-s-in-house-assets-against-the-5-per-cent-limit.md) |

## Checking plan

- What the AI does: From the acquisition papers and the asset list, record the security or real property being acquired, whether the plan calls it an employer security or employer real property, the fair market values used, and whether the plan document describes the plan as an eligible individual account plan. Do not decide that the acquisition is inside the limit.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Subsection (b)(1) takes an eligible individual account plan outside subsection (a) for qualifying employer securities and qualifying employer real property. Read the rest of subsection (b) before applying that exception.
- The regulation's two examples use hypothetical values. They are not a valuation of this plan.

## Sources

- [29 USC 1107, employer securities and employer real property](https://www.law.cornell.edu/uscode/text/29/1107) (checked 2026-10-22)
- [29 CFR 2550.407a-2, acquisition limitation](https://www.law.cornell.edu/cfr/text/29/2550.407a-2) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*