New Study Indicates 17.7% of 401(k) Funds in Company Stock

A new study by the Employee Benefit Research Institute and the Investment Company Institute shows that 17.7% of all 401(k) plan assets are invested in company stock. Not all plans offer company stock, however. In general, only publicly traded companies do so. These companies allow employees to invest in company stock, may match employee deferrals in the form of stock, or both. Where company stock is an option, 32.6% of the assets are in company stock. Where the employer determines part of the mix of plan assets by making matching contributions the employee cannot change, 47.6% of all assets are in company stock in those companies where company stock is an option. Plans in which employees have full control over the investments show 29.3% of their assets in company stock in those companies where company stock is an option. Most investment advisors would say that these percentages are too high.