New Research on ESOP Trends

In its biannual research report The Total View, describing the retirement plan practices of its clients, Principal Financial Group reports that ESOP companies have higher-than-average contribution rates to defined contribution plans, with an average rate of 11.9% of compensation. One fascinating result of their analysis is that ESOP participants are more likely to contribute to a 401(k) plan than are employees in non-ESOP companies. Principal writes, "Participation rates in the 401(k) plans for companies that sponsor an ESOP is 63.1% while the average participation in a 401(k) plan is 60.2%." The report, which represents data from 37,000 plans and 3.7 million participants, is available at this link.