401(k) matching contributions in company stock: Costs and benefits for firms and workers

• 成果类型: Article
• 署名作者: Brown, Jeffrey R.; Liang, Nellie; Weisbenner, Scott
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; National Bureau of Economic Research; Federal Reserve System - USA
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2005.05.007
• 发表日期: 2006
• 页码: 1315-1346
• 关键词: Pension; 401(k) plan; ESOP; company stock; match policy

摘要

This paper tests for important determinants of why some employers provide matching contributions for 401(k) plans in company stock. We find that firms that match in company stock have lower stock price volatility and lower bankruptcy risk and are also more likely to offer a defined benefit plan, consistent with a recognition that imposing a concentrated portfolio can be costly for employees. Evidence also indicates that firms match with company stock to help deter takeovers by putting stock into friendly hands. Simulation results suggest that while portfolio-optimizing employees are made worse off by having their match restricted to company stock, sufficiently risk tolerant employees who follow naive investment strategies might prefer a 401(k) plan at a company with a company stock match to a plan at a company with an unrestricted match. (c) 2005 Elsevier B.V All rights reserved.