Boxer Bill Would Limit Stock Ownership in 401(k) Plans

Legislation introduced by Senate Barbara Boxer (D-CA) would limit the amount of employer stock that could be held in a 401(k) plan to 10% of the amount employees contribute and would require that employees be able to reallocate employer 401(k) matches in the form of company stock to other accounts.

Similar limits would be placed on other assets owned by the company. The legislation follows some well-publicized scandals in some 401(k) plans that invested heavily in employer-controlled assets (although not stock) that ended up having no value. The bill's future is uncertain, but concern with undiversified investments in 401(k) plans has become an issue of growing importance.