Ahh.  I worked for Nortel for a while too.  The way the plan worked was 2 for one stock.  But when the stock vested after a period of time, you could sell and invest in whatever you chose.  I feel sorry for your neighbour's situation, but I unloaded Nortel in favour of a diversified portfolio the instant I could.  Many of my colleagues did the same.  Result?  A balanced investment strategy at 50% of market cost -- far better than public service plans in many ways.

Your neighbour believed the corporate hype and ignored the first rule of investing.  His situation is lamentable, but there was plenty he could have done to avoid it.

Incidentally, my mother worked for Bell, which had an identical plan.  Bell never really tanked, but she, too, diversified the instant she could.  She retired earlier and richer than my stepfather, who was a manager in the federal public service......