Stock Limits Limited: Fidelity Survey

March 7, 2002 ( - Retirement plan trading restrictions on company stock may not be as extensive as some might have feared, a new study indicates.

According to Fidelity, 56% of the 670 plans that offer company stock use cash matches, while the rest match with company stock.  

Of the 44% using company stock for matches, 66% have no transfer rules. Another 15% lifted company stock trading restrictions in 2001 and 21% are thinking about making that move in 2002.

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Overall, 7% of the defined contribution plans administered by Fidelity offer company stock.  

Other conclusions included:

  • Participants in plans offering company stock had larger average balances those those without — $57,000 to $40,000.
  • Average number of investment choices is greater among plans with company stock than those without – 25 to 13.
  • In plans with company stock, diversified equities represent 40% of the assets, as opposed to 63% of assets in plans without company stock. Roughly 26% of all plan assets are so invested, according to Fidelity.

The survey was based on an analysis of 9,300 defined contribution plans administered by Fidelity.