Fidelity Investments' most recent survey indicates a major shift underway in the strategies stock plan participants are using those benefits: Most are aiming their future proceeds as retirement or investment.
The study indicates that 57 percent of company stock plan assets are now earmarked for eventual investment or retirement savings plans, and only 13 percent are being targeted to pay off bills or future debt.
In the past, heavier emphasis was placed on using those assets for bills or financial needs (32 percent) and less than a quarter was aimed at retirement needs.
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The survey, which included nearly 2,000 stock plan participants from more than 100 companies, found those taking part in stock options, stock purchases and restricted stock plans tend to be aggressive savers, saving 18 percent of their annual income.
Those savings are being earmarked for 401(k)-style plans (51 percent), personal savings (17 percent), company stock plans (14 percent), brokerage accounts (8 percent) and IRA accounts (8 percent).
"Our study indicates that more participants are now in a healthier financial position to focus on saving rather than debt relief," said Kevin Barry, executive VP of Fidelity's Stock Plan Services division.
"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."
Despite the increased awareness and involvement, many participants still say they have poor investment knowledge. Almost half said they have mediocre general investment knowledge, and 71 percent say they cannot fully explain their company stock plan to others.
Fidelity, like many other providers, has offered stock plan investment analysis, webinars and online guidance and access to accounts to help participants better handle their investments.
According to the study, more participants in restricted stock and stock option plans report they are aware of the value of the grants they hold (82 percent this year, up 15 points from last year) and the value of their current stock options (86 percent compared to 79 percent in 2011). More restricted stock and stock option plan participants know their vesting schedules (88 percent, up 10 points from last year).
Six out of ten participants in all plan types said they plan to leave their assets in their company stock plan once they are fully vested.
About one in five (19 percent) 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.
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