ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, March 11, 1996 TAG: 9603130005
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: MONEY MATTERS
SOURCE: MAG POFF
MEMO: ***CORRECTION***
Published correction ran on March 12, 1996.
An incomplete answer was included on Monday's Money page. The
response was to a reader's question about the value of Kmart Corp. stock
in the event that the company files for bankruptcy. Here is the complete
paragraph: Probably nothing would happen to the value of the stock if
the company, as some people have speculated, should file under Chapter
11, in which the company would ask for protection from creditors during
its financial reorganization.
Q: Recently I called an insurance company to request a quote. They asked for my Social Security number, which they said they use for filing quote information. I thought you are required to give your Social Security number only whenever taxes are involved, including payroll purposes, bank accounts, etc. To whom, and under what circumstances, are you required to provide your Social Security number?
A: You are correct in believing that you do not have to give your Social Security number to anyone merely for identification purposes.
Fred Ayscue, manager of the Social Security office in Roanoke, said you have to reveal your number for tax purposes. This means you must provide it to your employer, your bank, your mutual fund manager, your brokerage house and the like. Banking and investment companies are required to report earnings to the government by Social Security number.
You do not have to reveal the number to any other type of company or person, Ayscue said. Whether you choose to provide the number is up to you.
If you refuse, however, it is up to the company to decide whether it wishes to do business with you.
Kmart stock appears safe for now
Q: If you own Kmart Corp. stock, what would happen if the company should file for Chapter 11 or Chapter 7 bankruptcy? Would the stock be worthless?
A: Tyler Pugh, senior vice president and branch manager at the local office of Wheat First Butcher Singer, said there have been no rumors about Kmart filing for Chapter 7 bankruptcy, which is complete liquidation. The stock would then presumably have no value, but such an event appears unlikely.
Probably nothing would happen to the value of the stock if the company, as some people have speculated, should file under Chapter 11, in which the company would ask for protection from creditors during its financial reorganization.
Indeed, Pugh said, the value of the stock might even go up in the short term because Kmart would have breathing room in reorganization. The company would not go out of business.
The stock's longer-term prospects depend on the long-term outlook for the company.
Pugh said the stock has recently been trading in the range of $6 a share, a price that takes into account the retailer's recent troubles. That is the low end of the range for the last year, when Kmart traded as high as $16 a share.
Where to get 401(k) information
Q: What kind of documentation should you get when you have a 401(k) plan at work? If you have questions about the plan, who can you call about the plan besides the plan administrator?
A: Donald J. Potter Jr. of PR Taylor, a pension and investment consultant in Roanoke, said your employer or the plan administrator must provide you with a summary description of the plan. This document, which is required by the government, sets forth the basic provisions of the 401(k) plan.
Each year, furthermore, the administrator must give you an annual report. This must show the balance at the beginning of the year, contributions during the year, earnings, distributions and the ending balance, Potter said.
Many employers do more, such as providing quarterly reports, but this goes beyond the mandates of the law.
Only the plan administrator knows the specifics of your plan. But if you have a concern about the plan, Potter said, you should call the Department of Labor in your community. You can find the number in the blue-lined pages of the telephone directory. In Roanoke, the number is 857-2331.
LENGTH: Medium: 78 linesby CNB