Taking Stock Of 401(k) Plan Design
If your 401(k) plan is overweighed in company stock, tread carefully. Before regulators mandate the amount of stock allowed, fiduciaries should take action to avoid future problems. When 401(k) plan participants heavily invest their retirement savings in their employer's stock, both the company and the employees may be taking on more risk than they bargained for. That painful reality is becoming clear to Enron employees who placed large portions of their 401(k) assets in Enron stock, which went from being one of the strongest performers on the stock market to being nearly worthless in a matter of months. This article deals with stock options and equities.