PLANSPONSOR - October/November 2020 - 30
INVESTMENT FOCUS
Everyone Has a Stake
Company stock vs. ESOPs as a DC investment option
" J
ust as the status of citizenship
conferred upon all has achieved
political democracy, so the individual
and private ownership of capital
by all households would achieve economic
democracy, " wrote Louis Kelso in
" The Capitalist Manifesto " in 1958. An
American lawyer and innovative investment
banker, Kelso pointed to the increasing
concentration of wealth in the world
economy among business owners-and
to workers' getting an ever-shorter end
of the economic stick. Trying to shift
the balance, in 1956, he devised the first
employee stock ownership plan (ESOP),
to allow a California newspaper publisher
to grant ownership to its employees.
Employers can meet that goal today
by granting, or selling, stakes in their
business via several methods such as creating
an ESOP or placing company stock
in their 401(k) plan. Joseph Blasi, Ed.D.,
a distinguished professor at the Rutgers
University School of Management and
Labor Relations, observes, " I divide the
world into good and bad employee ownership
and think ESOPs are a worthwhile
tool. But we're not in favor of excessive
company stock in 401(k)s bought with
workers' savings. "
" Whether company stock in the
401(k) is a good idea can depend on which
hat [the plan sponsor] wears, " says Robyn
Credico, leader of defined contribution
(DC) consulting at Willis Towers Watson,
in the firm's Arlington, Virginia, office.
In certain circumstances, employers are
able to deduct from their tax bills dividends
paid to employee/owners. " That
can be a big deal financially and tends to
be a primary reason for public companies
offering stock in their retirement plans, "
she explains. Additionally, it is a lower-cost
way to make matching contributions and
frees corporate cash to flow elsewhere.
30 PLANSPONSOR.COM October - November 2020 Art by Juliette Borda
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PLANSPONSOR - October/November 2020
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2020
Time to Take Stock
2020 DC Survey: Plan Benchmarking
Dangers of Debt
Everyone Has a Stake
ESG Across Asset Classes
'Onboard' Education
PLANSPONSOR - October/November 2020 - Cover1
PLANSPONSOR - October/November 2020 - Cover2
PLANSPONSOR - October/November 2020 - 1
PLANSPONSOR - October/November 2020 - 2
PLANSPONSOR - October/November 2020 - 3
PLANSPONSOR - October/November 2020 - 4
PLANSPONSOR - October/November 2020 - 5
PLANSPONSOR - October/November 2020 - 6
PLANSPONSOR - October/November 2020 - 7
PLANSPONSOR - October/November 2020 - 8
PLANSPONSOR - October/November 2020 - 9
PLANSPONSOR - October/November 2020 - 10
PLANSPONSOR - October/November 2020 - 11
PLANSPONSOR - October/November 2020 - 12
PLANSPONSOR - October/November 2020 - 13
PLANSPONSOR - October/November 2020 - 14
PLANSPONSOR - October/November 2020 - 15
PLANSPONSOR - October/November 2020 - Time to Take Stock
PLANSPONSOR - October/November 2020 - 17
PLANSPONSOR - October/November 2020 - 18
PLANSPONSOR - October/November 2020 - 19
PLANSPONSOR - October/November 2020 - 2020 DC Survey: Plan Benchmarking
PLANSPONSOR - October/November 2020 - 21
PLANSPONSOR - October/November 2020 - 22
PLANSPONSOR - October/November 2020 - 23
PLANSPONSOR - October/November 2020 - 24
PLANSPONSOR - October/November 2020 - 25
PLANSPONSOR - October/November 2020 - 26
PLANSPONSOR - October/November 2020 - 27
PLANSPONSOR - October/November 2020 - Dangers of Debt
PLANSPONSOR - October/November 2020 - 29
PLANSPONSOR - October/November 2020 - Everyone Has a Stake
PLANSPONSOR - October/November 2020 - 31
PLANSPONSOR - October/November 2020 - ESG Across Asset Classes
PLANSPONSOR - October/November 2020 - 33
PLANSPONSOR - October/November 2020 - 'Onboard' Education
PLANSPONSOR - October/November 2020 - 35
PLANSPONSOR - October/November 2020 - 36
PLANSPONSOR - October/November 2020 - 37
PLANSPONSOR - October/November 2020 - 38
PLANSPONSOR - October/November 2020 - 39
PLANSPONSOR - October/November 2020 - 40
PLANSPONSOR - October/November 2020 - Cover3
PLANSPONSOR - October/November 2020 - Cover4
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