Many Employers Loosening Company Stock Rules in 401(k) Plans, But Workers Not Responding

A new survey from Hewitt Associates, Hot Topics in 401(k) Plans, indicates that that 38% of 300 large public companies surveyed use company stock as a match to 401(k) deferrals, and 86% restrict diversification of those contributions. But 62% of those with restrictions either have already loosened them or are considering doing so. The study can be found at www.hewitt.com. That may not make much difference, according to a new study by the Boston Research Group of 100 employees with company stock in their 401(k) plans. The average employee stock holdings of the group was 30% of total assets; a third of the employees were more than 50% invested in company stock. Only 12% of the group had reduced their investment in company stock since Enron, and only 25% said they were less comfortable with company stock post-Enron. Two-thirds said that 15% or more was a prudent investment in company stock in their plans, and 50% said 25% or more was.