When companies offer their stock as benefits to their workers, the fiduciaries of those benefits typically fall under the eye of the Employee Retirement Income Security Act. ERISA regulations ensure that minimum standards are met when private companies provide such benefits. Tennessee business may not be required to provide those benefits, but if they do, they must follow the guidelines ERISA has established.
Recently, employees and former employees of Phillips 66 filed a lawsuit that they hope will achieve class action status. The lawsuit accuses the committee in charge of plan investments of failing in their fiduciary duties to offer appropriate employer securities and to diversify investments for the participants. The participants claim the reckless actions of the committee have cost them millions of dollars.
The main complaint of the investors is that the plan holds hundreds of millions of dollars in two different ConocoPhillips stock funds, which is the parent company of Phillips 66. In fact, 25 percent of the plan's assets are invested in ConocoPhillips, which, according to the complaint, is a violation of ERISA diversification regulations. Additionally, the ConocoPhillips stock is closely associated with Phillips 66 stock, resulting in more than half of the fund's assets essentially related to the same high-risk sector of the economy.
Participants in company investment plans have a right to know their funds are being managed with care and according to applicable ERISA regulations. Losing profits marked for retirement can be devastating, often leaving people with few options. People in Tennessee who are concerned about the actions of the fiduciaries in charge of their benefits have every right to seek the advice of an attorney.
Source: plansponsor.com, "Phillips 66 Retirement Plan Faces Suit Over Inclusion of Former Parent Stock", Rebecca Moore, Oct. 18, 2017