Three retirees sued the retirement plan investment committee of Phillips 66 for failing to provide them a wider array of investment offerings in the company’s 401(k) retirement plan. Plan sponsors have a fiduciary responsibility to provide a diversified mix of investment options.
The three retirees who are seeking to represent about 12,000 other plan participants accuse senior executives of Phillips 66 who manage the retirement plan of continuing to offer an investment option that allows participants to buy the stock of ConocoPhillips, according to the lawsuit that was filed earlier this week in federal court in Houston.
The stock offering was a holdover from 2012 when ConocoPhillips transferred its refining, marketing and transportation operations to Phillips 66, which then became a separate and independent company. About 12,000 employees of ConocoPhillips became employees of Phillips 66, according to the lawsuit.
Companies can include their own company stock as part of a 401(k) retirement plan without violating diversification rules. That rule, however, doesn’t extend to the stock of unrelated companies, according to the lawsuit.
Phillips 66 said it would not comment on the lawsuit.