401(k) plans and employer stock

December 30, 2008

A look at the trend in 401(k) investment options over the past two decades shows a steady move away from employer stock as an investment vehicle.

Percent of 401(k) plans participants allowed to choose plan investments, 1985–2005
[Chart data—TXT]

BLS data provide some indication of the use of employer stock as a 401(k) investment vehicle. They indicate that workers' exposure to own-employer stock has declined substantially since 1985.

Among funds contributed by employers, a significant fraction of this decline was likely caused by the increased control of the funds given to workers, as shown in the chart. Since employer stock was more prevalent among employer-provided funds with no investment choice than among employer-provided funds in which employees chose investment allocation, the increasing fraction of funds having employee choice caused employer stock exposure to decline.

Another source of decline in workers' exposure to own-employer stock was that, within those plans allowing choice, there was a marked decline in the fraction allowing employer stock as a possibility. This trend applied to both employer- and employee-provided funds.

These data are from the BLS National Compensation Survey program. To learn more, see 401(k) plans move away from employer stock as investment vehicle, by William J. Wiatrowski, Monthly Labor Review, November 2008.


Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, 401(k) plans and employer stock on the Internet at http://www.bls.gov/opub/ted/2008/dec/wk5/art02.htm (visited September 28, 2016).


Recent editions of Spotlight on Statistics

  • A look at healthcare spending, employment, pay, benefits, and prices
    As one of the largest U.S. industries, healthcare is steadily growing to meet the needs of an increasing population with an increasing life expectancy. This Spotlight looks at how much people spend on healthcare, current and projected employment in the industry, employer-provided healthcare benefits, healthcare prices, and pay for workers in healthcare occupations.

  • Employment and Wages in Healthcare Occupations
    Healthcare occupations are a significant percentage of U.S. employment. Some of the largest and highest paying occupations are in healthcare. This Spotlight examines employment and wages for healthcare occupations.

  • Fifty years of looking at changes in peoples lives
    Longitudinal surveys help us understand long-term changes, such as how events that happened when a person was in high school affect labor market success as an adult.