Public Companies Reducing Company Stock in 401(k) Plans

According to a recent survey by Pensions & Investments, "among the biggest DC [defined contribution] plans, company stock represented a 15.6% allocation as of Sept. 30. Data from previous surveys show an almost steady annual drop from the 24.7% stock allocation in 2006." An annual survey by the Plan Sponsor Council of America reports that in 2002, 16% of 401(k) plans had employer stock as a majority of their plan assets. The most recent data available, from 2011, shows that that rate had declined to 5.3% of plans.

In addition, Pension & Investments reports that large companies are taking "aggressive steps" to reduce holdings of company stock in 401(k) plans. Those steps include capping the portion of participant accounts that can be in company stock, providing education campaigns about the value of diversification, and removing company stock as an option from their plans.