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AECOM Employees: Smarter Ways to Manage Taxes on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for AECOM AECOM employees are primarily covered through its benefit partnership with UnitedHealthcare. This relationship provides comprehensive health insurance options to the workforce, including various plan structures designed to meet diverse healthcare needs. Potential Healthcare Cost Increases in 2026 In 2026, AECOM employees may face substantial healthcare cost increases as many large companies, including AECOM, prepare to adjust their benefit structures in response to rising medical costs. The Affordable Care Act marketplace is projected to see premium hikes exceeding 60% in some states, primarily reflecting the loss of enhanced federal subsidies. This situation has the potential to significantly raise out-of-pocket expenses for employees as employers may shift more costs onto their workforce; over half are likely to increase deductibles or out-of-pocket limits. Employees need to strategically navigate their options and familiarize themselves with upcoming benefit changes to mitigate the impact of these financial pressures. Click here to learn more

'AECOM employees with concentrated stock positions may benefit from thoughtful tax planning that allows for tax deferral while balancing liquidity, compliance, and long-term compounding,' Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'AECOM employees who hold highly-appreciated stock may want to consider tax-efficient strategies that help mitigate their liabilities while aligning with their overall retirement goals,' Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How taxes can affect investment returns, particularly on concentrated stock positions.
Exchange funds and options-based strategies as methods for tax deferral and diversification.
Alternative planning techniques outside ETFs, including charitable trusts and gifting strategies.

By Carlos Hernandez, Wealth Enhancement advisor

When it comes to driving portfolio returns, many investors aim to keep management fees low by investing in low-cost index funds and exchange-traded funds (ETFs). While fees matter, however, the real culprit for lower-than-anticipated performance is taxes. ¹

Wealth Enhancement advisor Carlos Hernandez explains: 'By losing less to taxes each year, investors have access to more capital that can continue to compound over time. This makes tax deferral an important part of an effective financial plan.' AECOM employees looking for long-term growth strategies could benefit by understanding how to better manage their investment tax burdens.

Trade Money

One area where taxes can take a toll is on the sale of company stock or other concentrated investment positions. AECOM professionals looking to diversify could face significant capital gains taxes on an outright sale. One way to diversify without triggering immediate capital gains is through exchange funds. By contributing their highy-appreciated stock to a pooled fund, investors can trade their concentrated holdings for shares in a diverse basket of securities. This method can be used by AECOM employees who want to diversify while postponing taxable events.

Although this method allows for tax deferral, it also requires investors to hold the exchange fund for a period of time, typically seven years. ² This could create a challenge for investors who require liquidity. Additionally, these funds are often exclusively accessible to wealthy, accredited investors—something AECOM executives should carefully evaluate.

Funds Based on Options

Another way to mitigate taxes on the sale of highly-appreciated stock is by using options contracts. The idea is to hedge risk with put options while covering the cost of those puts by selling call options—a strategy called 'collaring'. From there, the strategy reverses, with investors selling put options and using the proceeds to buy call option on an equity or bond index. ³ If managed effectively, this helps to diversify a concentrated portfolio while still maintaining liquidity.

Given the complexity of this strategy, meticulous planning is necessary. It's generally recommended that investors work with an experienced financial advisor before pursuing this approach.

Things to Be Aware of

Although these strategies can be beneficial for AECOM employees who hold highly-appreciated stock, caution is recommended. There are costs associated with these approaches, and potential liquidity risks. Additionally, the IRS may eventually contest such arrangements because their tax status has not been thoroughly examined—something AECOM retirees should keep top of mind.

'Tax drag reduction strategies can be effective, but they must be assessed through the lens of risk, liquidity, cost, and compliance,' warns Carlos Hernandez. What is appealing in theory must hold up to inspection in the real world.

Alternative Strategies

Although they show promise, investors with highly-appreciated stock or those looking to postpone gains have other alternatives besides exchange funds or options. Other tactics could include:

- Prepaid variable forwards (subject to IRS regulations, contracts to sell at predetermined terms in the future).
- Charitable remainder trusts (CRTs), which allow investors to donate appreciated stock to a charitable trust and receive a stream of regular income in return.
- Donor-advised funds (DAFs), which provide investors with a tax deduction for the fair market value of the appreciated stock they donate.
- Other gifting techniques, such as direct donations to charity or family.
Each has its own set of guidelines, advantages, and disadvantages. To limit unnecessary taxes or violating the constructive sale regulations, careful planning is necessary for AECOM professionals managing complex portfolios.

The Bottom Line

Although the movement to mitigate the tax burden on investments is not new, the instruments are changing. Both exchange funds and options-based structures offer investors a way to manage tax liabilities, especially for AECOM employees who hold highly-appreciated stock.

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In the end, taxes are unavoidable. However, with the correct set of instruments, they can be controlled and postponed. 'The real value comes from aligning tax strategy with investment strategy,' summarizes Carlos Hernandez.

Sources:

1. BlackRock Advisor Center. ' Investing for After-Tax Returns ,' 2025.

2. Kiplinger. ' Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings ,' by Robert Waskiewicz. Sep. 11, 2025.

3. Financial Planning Association. ' Tax-Efficient Ways to Diversify Concentrated Stock Positions ,' by Peter Lazaroff. Oct. 2024.

What is the 401(k) plan offered by AECOM?

AECOM offers a 401(k) plan that allows employees to save for retirement by contributing a portion of their salary on a pre-tax or after-tax basis.

How does AECOM match employee contributions to the 401(k) plan?

AECOM provides a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.

What are the eligibility requirements for AECOM’s 401(k) plan?

Employees of AECOM are generally eligible to participate in the 401(k) plan after completing a specific period of service, typically within the first year of employment.

Can I change my contribution percentage to AECOM's 401(k) plan?

Yes, employees can change their contribution percentage to AECOM's 401(k) plan at any time, subject to certain guidelines.

What investment options are available in AECOM's 401(k) plan?

AECOM's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How can I access my AECOM 401(k) account information?

Employees can access their AECOM 401(k) account information through the plan's online portal or by contacting the plan administrator.

What happens to my AECOM 401(k) if I leave the company?

If you leave AECOM, you can choose to roll over your 401(k) balance to another retirement account, leave it in the AECOM plan, or withdraw the funds, subject to tax implications.

Is there a loan option available through AECOM's 401(k) plan?

Yes, AECOM allows employees to take loans against their 401(k) balance under certain conditions.

How often can I change my investment allocations in AECOM's 401(k) plan?

Employees can change their investment allocations in AECOM's 401(k) plan as often as they wish, typically without restrictions.

Does AECOM offer financial education resources for 401(k) participants?

Yes, AECOM provides financial education resources and workshops to help employees make informed decisions about their 401(k) savings.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

This news is crucial due to the economic environment as companies streamline operations to enhance efficiency and shareholder value. The restructuring can lead to more robust financial performance, vital for investors. Additionally, share buybacks indicate confidence in financial stability, which is significant in the current volatile market conditions (AECOM Investors) (Los Angeles Business Journal).

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For more information you can reach the plan administrator for AECOM at 300 South Grand Avenue Los Angeles, CA 90071; or by calling them at (213) 593-8000.