Employer Stock Levels Heighten 401(K) Risks
Business Insurance (05/07/01) Vol. 35, No. 19 p.1; Greenwald, Judy

Employees' 401(k) plans are usually heavily invested in their employer's stock options, which may not bode well for employees that may retire soon or have been laid off by their employers. In fact, employers could be held liable for reduced retirement benefits due to failing stocks. Many 401(k) critics claim that employers should have better educated their employees about diversifying their portfolios before the current economic downturn, especially since 401(k)s have become the main source of retirement for many people. Many employers claim that 401(k)s invested in company stock can boost morale and productivity, but investors claim that too much will hurt not only the employee, but the company as well.

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