Only 12% of the sample polled by WorldatWork, reported any policy changes in light of the Enron debacle. However, of those without limits on company stock holdings by a participant, 74% say they’re reconsidering that rule.
The issue of company stock is hot topic amid the controversy swirling around energy trader, Enron, which has now applied for federal bankruptcy protection.
Former Enron workers have charged that they were improperly pressured into buying company stock and then blocked from selling it while its value plummeted as Enron’s finances quickly fell apart.
Making a Match
Results of the survey also show that nearly one out of five companies match their employees’ 401(k) contributions with company stock only while another 6% use both cash and stock in their match.
Company stock is not just used for a match, the survey revealed that 34% of the companies allow participants to buy additional company stock shares with their 401(k) contributions.
Further, 88% of the companies polled place no limit on the amount of stock a participant can hold in his or her account.
The survey also revealed that the vast majority of companies do not have a large proportion of company stock in their 401(k) plans. Only 2% of companies in the survey indicated that more than 80 % of their company’s 401(k) was being held in company stock.
The survey was conducted in January 2002 and represents 886 responding WorldatWork member companies in the US.
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