Company Stock in 401(k)s: Proceed With Caution
Although concentrated ownership of company stock in retirement plans is less common than a few years ago, it's no less risky.
401(k) plans have made great strides in recent years--reducing costs, simplifying investment menus, and automating portfolio allocation. But a surprisingly large number of plans still include one feature that really should go: offering the plan sponsor's own shares to workers.
Research consistently shows that owning your employer's stock in a workplace retirement plan is risky. And although concentration of employer stock in workplace plans has been declining in recent years, stubbornly high pockets of concentration remain.