While the government tries to sort
out the financial fiasco that is Enron, WorldatWork surveyed almost 900 of
its members to determine how our member companies were reacting to the situation
and if their 401(k) programs or retirement funds could be at the same risk.
According to the 401(k) Survey,
only 23% of responding companies match 401(k) contributions with all or partial
stock. In addition, 34% of companies allow employees to purchase company stock
with their individual contributions. So, while this may be a low number that
allow company stock, among those that do only 12% have limits on how much
of the portfolio can be held in company stock.
Among the companies that allow
stock to be held in 401(k) portfolios, 56% require that employees hold that
stock for a certain period of time before they can sell or diversify. Most
(50%) require the stock be held until a certain age, while another 31% require
it be held until the employee leaves the company.
Other key findings include:
64% of companies report that
less than 20% of their total retirement fund is held in company stock.
52% of companies that require
employees to hold stock for a certain period of time are reconsidering their
policies in light of the Enron case.
39% of companies allow the employee
to determine the mix of company stock and cash in their 401(k) match; 37%
are determined solely by the company.
1. Does your company offer a 401(k)
program to employees?
Yes
95%
No (Skip to End)
5%
2. Does your company provide a
contribution or some type of match to the employee's individual 401(k)
contribution?
Yes
93%
No
7%
3. What does the company match
or contribution consist of?
Dollars only
77%
Company stock only
17%
Combination of dollars and
company stock
6%
N/A
0%
4. If your company provides a match
that can include both dollars and company stock, who determines the mix or
proportion of company stock and other investment vehicles?
Entirely determined by employee
37%
Entirely determined by company
39%
Determined by employee within
certain company rules and/or limitations
24%
N/A
0%
5. Can your employees acquire company
stock through your 401(k) program through their individual contribution?
Yes
34%
No
66%
6. Under your company's 401(k)
program, is there any restriction on an individual employee's contribution
(excluding any match) to company stock?
Yes
21%
No
79%
7. Under your company's 401(k)
program, is there any restriction or limitation on the amount an employee
dedicates to their combined individual and company-provided contribution/match
to company stock?
Yes
12%
No
88%
If yes, what is the limit? %
n
Mean
Median
Max
Min
31
31.35
25
100
1
8. Does the stock employees receive
through your 401(k) have limitations regarding how long they must hold
the stock?
Yes
56%
No
44%
9. If yes, how long must they hold?
Until employee reaches a
certain age
51%
Until employee departs from
company (retirement, termination, voluntary departure)
30%
1 - 5 years
16%
5 - 10 years
1%
10+ years
2%
10. Approximately what percent
of all money in your company's retirement plan is in your company’s
stock?
Less than 20%
64%
20 - 39%
19%
40 - 59%
11%
60 - 79%
3%
More than 80%
2%
11. In light of the Enron case,
has your company either reconsidered or already taken action to change any
policies or rules regarding its 401(k) program?
