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Benefits March 1, 2007
MI Energy Company Stops Offering Company Stock in 401(k) Plan
March 1, 2007 (PLANSPONSOR.com) - Fearful of being
hit with participant lawsuits relating to the use of company
stock in its retirement plans, a Jackson, Michigan energy
company is dropping such shares as a 401(k) option and from
its savings plan matching contribution.
Reported by Fred Schneyer
Starting May 1, the company said its CMS Energy Common Stock Fund will no longer be open for new 401(k) investments and the employer’s match will no longer be in CMS Energy Common Stock, the Detroit Free Press reported.
Participants will be able to reallocate investments
in CMS Energy Stock Fund to other plan investment
alternatives. Beginning November 1, 2007, any remaining
shares in the CMS Energy Stock Fund will be sold and the
sale proceeds will be reallocated to other investment
options, the news report said.
The money will be reallocated by the employees and the
amount they have in their CMS stock fund will be
allocated to other options. The company also said it will
pay the brokerage fees and commissions related to the
transfers.
“This change was made primarily to reduce the
company’s exposure to lawsuits in connection to the
employee savings plan,” Jeff Holyfield, a spokesman for
CMS, told the newspaper. “There are several other
companies that are taking this step.”
According to the news report, any shares employees own
outside the 401(k) plan will not be affected by the
change.
Officials at CMS said there were about 9,800 employees and retirees who participate in the 401(k) plan, which began in 1963. As of Feb. 20, there were 10.7 million shares of CMS common stock in the company’s stock fund.