Defined contribution plan participants at large corporations still have almost 23% of assets invested in their own company's stock, despite changes in market practices since the collapse of Enron, according to a report released today by Greenwich Associates. However, the proportion of companies with total pension assets over $250 million that made their DC matching contributions in company stock fell to less than 20% in 2004, from more than 30% in 2003. And 9% of large companies made their matching contributions in either cash or stock in 2004, up from 3% in 2003, indicating that some companies that had offered only stock contributions are now offering a cash option.
The report points out that ERISA limits company stock in defined benefit plans to 10%. "This is a standard that companies may wish to adopt before someday legislation requires it," said Chris McNickle, a Greenwich consultant, in the report.