401(k) Plans Still Heavily Invested in Employer Stock

A new Congressional Research Service study of 277 large public companies has found that employer stock accounts for an average of 38% of all assets in defined contribution plans other than stand-alone ESOPs, with a median of 24.7%. The report Employer Stock in Retirement Plans: Investment Risk and Retirement Security, found that employer matches in company stock led to higher concentrations of employer stock in the plans. Where company stock was the match, 45.4% of assets were in these securities; otherwise, 27.2% was. Larger companies and companies with better than average stock returns also had higher percentages of employer stock in their plans. The average concentration of employer stock was lower in companies with defined benefit plans, but the median concentration was about the same.