Aon Drops Company Stock Fund From Its $5.3B 401(k) Plan

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By Carmen Castro-Pagan

Aon Plc is terminating the company stock fund as an investment option in its $5.3 billion 401(k) plan.

The Aon Stock Fund will be liquidated and removed from the plan by the end of December 2017, the company said in its latest filing with the Securities and Exchange Commission. Employees haven’t been able to contribute to the fund since April, the filing said. Plan participants who currently contribute to the fund, which held $238.3 million in assets as of the end of 2016, will need to select a different investment option, the company said.

Aon eliminated the option to invest in the company’s stock fund “to encourage greater diversification of retirement savings,” Aon’s spokeswoman Maurissa Kanter told Bloomberg BNA July 14 via email.

In addition to investing in Aon’s stock, the plan also invests in the stocks of other 145 companies, including Microsoft Corp. ($20.9 million), Amazon.com Inc. ($19.8 million), and Alphabet Inc. ($27.7 million), the parent company of Google.

In recent years, big-name companies have been sued by workers challenging their employers’ decision to add poorly performing company stock as an investment option in their retirement savings. Those companies, including Eaton Corp., RadioShack Corp., Whole Foods Corp., Lehman Brothers, JPMorgan Chase & Co., International Business Machines Corp., and BP Plc defeated lawsuits by employees who claimed the companies failed to remove poorly performing company stock from their retirement plans. However, these results haven’t stopped employees from filing new lawsuits against other companies, including Chesapeake Energy Corp., Seventy Seven Energy Inc., and General Cable Corp.

Aon shares closed at $136.22 July 14 on the New York Stock Exchange, up 23 percent from $110.55 a year earlier.

As of the end of 2016, Aon’s 401(k) plan had 36,132 participants.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

For More Information

Text of the SEC filing is at http://src.bna.com/qMF.

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