Plan's retention of substantial amounts of spun-off business' stock in a single stock fund states a claim against the Administrator's common law duty of prudence.
While allowing the participants to select funds can satisfy the statutory duty of diversification, it does not address common-law prudence.
Liability is possible where a frozen defined contribution plan does not timely divest the single-stock fund.
Dissent:
Participants could allocate their investments. The fact that prudence and diversification are codified separately means that they shouldn't be merged in common-law analysis.
[Again, folks, just my scribbling. This is never legal advice.]