EBRI's Release of 2013 Data Shows Extent of Company Stock in 401(k) Plans

The Employee Benefit Research Institute (EBRI) released its annual report on 401(k) plans, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2013. EBRI found that company stock constitutes, on average, 7.3% of plan assets. That percentage is unchanged from 2012, but has declined steadily for the five prior years from 11% in 2007. The 72,676 plans in EBRI's dataset represent 26.4 million participants, roughly half of all 401(k) participants in the country. Many of these plans are in private companies, which rarely offer company stock as a 401(k) investment option: plans with company stock are 2.6% of plans and 35% of participants. Among those companies that do have company stock, that stock represents 18.8% of plan assets, ranging from 7.7% for the smallest companies (up to 100 participants) to 19.0% for the largest (over 5,000 participants).

Newly hired participants are the least likely to have high concentrations of company stock. Among those hired between 2006 and 2013, 90% to 93% have less than half of their plan assets in company stock. By contrast, those numbers fall to 76% to 79% for those hired in or before 2001.

The EBRI research also shows that the percentage of plan assets in company stock varies significantly by employee compensation. Among plans with company stock, the lowest-paid employees (with $20,000 to $40,000) have 24% of plan assets in company stock. That percentage falls for each income bracket, with the highest-paid employees (with over $100,000 in compensation) having 15% of plan assets in company stock. Since company contributions may constitute a greater portion of all contributions for lower-paid employees, this difference may be the result of companies making 401(k) contributions in the form of company stock.

EBRI's founder and only CEO Dallas Salisbury announced that he will become president emeritus of the organization. EBRI expects to announce Salisbury's replacement on July 1.