New Research: ESOPs and Other Benefit Plans

A new report from PLANSPONSOR magazine shows that ESOP companies are more likely than non-ESOP companies to offer secondary defined contribution and defined benefit plans. They are also are substantially more likely to offer health savings accounts (HSAs). PLANSPONSOR's annual defined contribution survey tracked the prevalence of retirement plans among 5,342 responding companies, 231 of which had ESOPs and 22 of which had KSOPs (ESOPs combined with a 401(k) plan). The firms are generally larger than most plan sponsors, although about one-half have assets less than $10 million in their retirement plans.

Within the sample, the survey finds that 95% of all ESOP and KSOP companies have 401(k) plans, compared to 86% of all respondents. Close to 40% of ESOP/KSOP companies have defined benefit plans, compared to 25% of all respondents, although that comparison is reversed in smaller companies (those with $50 million or less in defined contribution plan assets), where 6% have defined benefit plans, compared to 12% of companies without ESOPs. Interestingly, ESOP companies of all sizes are 6% to 15% more likely to offer HSAs.

We thank PLANSPONSOR magazine for generously providing the data tables used for this article. PLANSPONSOR is a leading information resource on retirement plans and the publisher of PLANSPONSOR magazine. To subscribe, visit www.plansponsor.com.