Part of the issue is that many assets of a company's employee benefits plan are often invested in the company's own stock, even when it is not prudent to do so.
A company's stock could start off as a fantastic investment for the plan's assets. When the stock is not a good investment, plan fiduciaries have a duty to put assets in a different investment. Essentially, plan fiduciaries must act in the best interests of plan participants, not the company or the company's management.
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If fiduciaries are aware of issues that could make company stock a bad investment, they have a duty to prudently manage the plan's assets and move those assets if necessary. BP ERISA lawsuits allege plan fiduciaries either knew or should have known about problems that made BP stock an unwise investment.
The Associated Press reported on 7/08/10 that almost 30 percent of BP's 401(k) was invested in BP stock—worth approximately $2.45 billion—leaving many people with massive losses in their retirement plans.