More workers are contributing to 401(k) retirement accounts, but many are still too heavily invested in their own company's stock, according...

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NEW YORK — More workers are contributing to 401(k) retirement accounts, but many are still too heavily invested in their own company’s stock, according to a national survey released yesterday by Hewitt Associates.

Hewitt’s annual benchmarking report, “How Well Are Employees Saving and Investing in 401(k) Plans,” found some 70.3 percent of workers participated in defined-contribution plans in 2004, up from 69.8 percent in 2003 and 68.2 percent in 2002.

“We saw some improvement … but we’re a little disappointed that we didn’t see more movement than we saw,” said Lori Lucas, director of participant research at Hewitt, headquartered in Lincolnshire, Ill.

That’s especially true, she said, because more companies have tried to educate workers about retirement savings and there’s been more public discussion about the need for private savings amid the debate over changing the Social Security system.

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The study also found that many workers continue to buy and hold large amounts of company stock, despite horror stories about workers who lost most of their retirement savings in the Enron and WorldCom collapses.

The Hewitt survey found that more than one in four workers held half or more of their total 401(k) balances in employer stock.

Many receive company stock as part of their employer’s “matching” contribution.

Lucas said 10 to 20 percent is the maximum one should hold of any asset, including company stock. She said she thought some workers were overwhelmed by the amount they need to save, so they do nothing.

“I use the analogy with weight loss. You may need to lose 100 pounds, but it’s easier to deal with if it’s 2 pounds a week,” Lucas said. “Instead of aiming for a $1 million nest egg, just save 2 percent more than you are every year until you get to 10 or 15 percent of wages.

“That’s something people can better grasp and take action on.”