The riskiest stock to own? Your employer’s

The riskiest stock to own? Your employer’sShortly before Enron collapsed, 62% of employees’ 401(k) assets were invested in Enron. Above, Playboy magazine’s “Women of Enron.” Pension plan consultants, in the wake of a recent Supreme Court case, are telling retirement plan sponsors to reconsider their decision to offer company stock in a 401(k) plan.

You might want to do the very same: Revisit your decision to invest in your company’s stock in your employer-sponsored retirement plan.

Consider: “Defined-contribution plan participants frequently allocate too much of their total retirement portfolio to company stock,” Mark Teborek, a senior consulting analyst with Russell Investments in Chicago, wrote in a recent paper, “Revisiting Company Stock in Defined-contribution Plans.”

In fact, company stock represents on average a whopping 22.5% of defined-contribution assets among plans with more than 5,000 participants, according to the Plan Sponsor Council of America’s 57th Annual Survey, 2014.And that sort of outsize position in company stock might be considered […]

Scroll to Top