ESOP Diversification Elections Vary Widely

ESOP companies must provide participants the option to diversify up to 25% of the stock in their accounts when they reach age 55 and have 10 years of plan participation. This increases to 50% at age 60. According new NCEO survey data, a majority of employees choose not to diversify. In 31.5% of companies responding, fewer than 10% of employees diversify; in 17.4%, 10% to 20% diversify; in 16.1%, 25% to 50% diversify; in 10.1%, 50% to 75% diversify; and in 24.8%, more than 75% diversify.