Fidelity Survey: Employees Moving Stock Out of 401(k) Plans While Putting More into ESPPs

A new Fidelity Investments study of Fidelity corporate clients with over $100 million in assets shows that the percentage of companies offering stock in their 401(k) plans dropped from 39% in 2005 to 28% in 2016, while the percentage of employees having company stock in these plans dropped from 41% to 23%. That translated into a drop in 401(k) assets in company stock from 16% in 2005 to 9% in 2016.

At the same time, employees are more active in employee stock purchase plans (ESPPs), with 28% in 2016 in these plans compared to 23% in 2014 (note that not all companies offer these plans; the study does not break the data out by this factor).

A survey done for Fidelity of 2,116 stock plan participants found that 83% were optimistic about their company's stock price. The study also noted that "employees who participate in their company's ESPP are three times more likely to sell company stock for emergency cash rather than take a loan from their 401(k)," and over half (52%) added that it was "highly unlikely" they would tap their 401(k) if they needed cash.