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Unitized Stock Fund
Old 03-19-2005, 08:59 AM   #1
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Unitized Stock Fund

The company I work for (a large fortune 100) gives employees their 401K match, and an additional 3% of salary for retirement in company stock. Instead of really getting shares of the stock we get instead 'units' in what they call a 'unitized stock fund'. I"m not sure why they do this instead of actual shares of stock (and being the company skeptic I think it's probably not going to turn out to be in my best interest....) Anyone have any experience with this type of situation and care to offer opinion on why it's done this way, and how it's either better or worse for employees? The 'unitized' stock fund is managed by Fidelity.

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Re: Unitized Stock Fund
Old 03-19-2005, 09:07 AM   #2
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Re: Unitized Stock Fund

I can think of one good reason off the top of my head - stocks are lumpy. What are they going to do about your 3% match if you've $50 left owing to you and the stock price is $60? The most obvious downside is that Fidelity might be taking a cut from you as a %age of assets held - an expense ratio just like any mutual fund. However, your company may be paying the costs themselves.
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