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3 companies removing company stock funds — SEC filings


Three companies are removing or have removed employer-stock funds from six defined contribution plans, according to the companies' recent 11-K filings with the Securities and Exchange Commission.

Discover Financial Services, Riverwoods, Ill., will eliminate the company stock fund in its Discover Financial Services 401(k) Plan effective Nov. 30, and will liquidate the fund's holdings “as soon as practicable thereafter,” its filing stated.

For the year ended Dec. 31, company stock represented $108.5 million, or about 10% of total plan investments of $1.05 billion.

Xerox Corp., Norwalk, Conn., will eliminate its company stock fund from three 401(k) plans effective Nov. 11. The stock fund will be liquidated and remaining balances will be transferred to a moderate asset allocation portfolio option within the plans. Xerox prevented new investments in the company stock fund in August 2015.

The plans affected are the Xerox Business Services Savings Plan, the Xerox Corporation Savings Plan, and the Savings Plan of Xerox Corporation and the Xerographic Division, Rochester Regional Joint Board On Behalf of Itself and Other Regional Joint Boards.

The plans' investments are governed by a master trust. For the year ended Dec. 31, Xerox stock represented $69.3 million, or 1.5% of the $4.53 billion in total master trust investments.

Also, Dublin-based Allegion PLC has eliminated its company stock fund from a pair of 401(k) plans for employees of its subsidiary, Schlage Lock Co. LLC, Carmel, Ind. A master trust governs the plans — the Schlage Lock Company LLC Employee Savings Plan and the Schlage Lock Company LLC Employee Savings Plan for Bargained Employees.

The Allegion Stock Fund was terminated in November 2015, and any accounts that remained in the stock fund were reallocated to an age-appropriate target-date fund for employees. The master trust had $402.5 million in investments at Dec. 31. For the year ended Dec. 31, 2014, Allegion stock represented $28 million, or 7.1% of the $395.7 million in total master trust investments.

In their 11-K documents, none of the companies described the reason for terminating their respective stock funds.

Callan Associates reported in January that 39.3% of plans offered company stock in 2015 vs. 34.3% in 2014. Prior to last year's uptick, the percentages of plans offering company stock had declined steadily from 48.3% in 2009, according to Callan's annual surveys. The most recent survey contained responses from 144 DC plan executives; most respondents work for large 401(k) plans.