Stock Plan Participants Earmarking Assets for Retirement

The majority of company stock plan assets (57%) are being earmarked for eventual investment or retirement savings after participants sell them.

Just 13% of the assets are being targeted to pay off bills or debt in the future, according to a survey by Fidelity Investments. In years past, the largest allotment of assets was directed toward paying off bills and debt (32%). Just one-quarter of the assets were targeted previously for future investment or retirement savings, the study found.   

It also found participants in stock option, stock purchase and restricted stock plans tend to be aggressive savers. On average, these participants report they are saving 18% of their annual household income using various savings vehicles, including: 

  • 51% into a 401(k) type plan; 
  • 17% into personal savings; 
  • 14% into company stock plans; 
  • 8% into brokerage accounts; 
  • 8% into individual retirement accounts (IRAs); and 
  • 2% into other vehicles. 

“On average, stock plan participants have a very strong savings rate and are using their company stock as an important building block for their retirement portfolio,” said Kevin Barry, executive vice president of Fidelity’s Stock Plan Services business.



According to the Fidelity study, more participants in restricted stock and stock option plans report they are aware of the value of the grants they hold (82% this year, up 15 points from last year) and the value of their current stock options (86% compared with 79% in 2011). More restricted stock and stock option plan participants know their vesting schedules (88%, up 10 points from last year).   

Six out of 10 participants in all plan types said they plan to leave their assets in their company stock plan once they are fully vested. Nearly one in five (19%) said that because of the economic downturn and market volatility, their stock plan assets are more important to their overall financial plans than they were before the downturn.  

Despite increased engagement, many participants still admit to poor investment knowledge. Nearly half (46%) ranked their general investment knowledge five or less on a scale from zero to 10. More than seven in 10 (71%) said they cannot fully explain their company stock plan to others.  

The survey is a follow-up to a study done last year among similar participants, and included 1,820 stock plan participants from 107 companies.