For retirement plans and planners, the benefits industry has become much more integrated lately. After moving from defined benefit (DB) to defined contribution (DC), plans are now looking at taking the best features of both. From health insurance during one’s career to care costs in retirement, holistic programs are looking at health savings accounts (HSAs) to complement the 401(k). From participant inertia and the rise of automatic features, sponsors are asking themselves how their financially illiterate participants can achieve financial wellness.

Whatever a retirement plan’s stated goal, economic independence for participants is universally agreed upon. In this arena, though, many savers tend to be their future-selves’ own worst enemy. Spending on current wants often trumps future needs, and even the financially savvy are likely to be distracted by short-term goals such as home ownership and tuition savings.

One way to address this is to align participants’ interests with the plan’s and, by extension, the company’s—by adding an employee stock purchase plan (ESPP) (see ESPPs Another Way to Help Workers Save for Retirement).

A best practice for employers offering an employee stock purchase as well as a 401(k) plan is to “emphasize the value of ownership,” says Dave Gray, vice president of client experience at Charles Schwab. Employees may not realize that the equity award program is meant to create a sense of ownership, he says, “and that ownership is at two levels: sense of ownership in the company and … their future.”

Along with the 401(k), Gray believes stock options should be presented to workers as one of the two key drivers that employees are going to leverage to determine their financial future. “The communication starts there,” he says. “The other piece that we think is critical is that the communication and underlying services support integration.” Stock ownership and retirement savings benefits are often viewed in silos and communicated in silos, he notes, but from the employee’s perspective, they are two components of the individual’s total financial wellness.

NEXT: ESPP vs. DB and DC.

“What makes these plans unique and interesting is that this is a way that companies can compensate employees attached to the company stock price,” says Emily Cervino, CEP, vice president of marketing at Fidelity Stock Plan Services. This allows corporations that make ESPPs and employee stock ownership plans (ESOPs) available to participants to align the interests of their employees along with the interests of their shareholders, plus giving their employees incentive and an interest in the company’s success, as well.

“The fact is that employees have lots of savings needs,” Cervino says. “Retirement is obviously a very important savings need, but there are lots of other short- and mid-term savings goals that employees have, like paying for college tuition or buying a home. So, having a path for saving for those other goals can be a really good way to help employees have a more diversified savings package.”

Adds Gray: “Employees should be educated on the interplay between 401(k) assets [and] the stock plans they may be able to participate in.”

“The thing that’s unique about ESPPs is that these are broad-based plans, which means that all employees at a company generally are eligible to participate in the plan,” she continues. “And these plans can be very beneficial for employees. In general, and there’s a huge amount of variety in these plans, these are plans that allow employees to purchase company stock at a discount—a discount that, at times, can be pretty substantial—and to purchase it conveniently through payroll deductions.”

If that sounds like a retirement plan, she says, “that’s where the similarities end.” For one thing, all stock purchases are post-tax. Depending on the type of plan, there may be some tax advantages on the shares purchased, but the rules governing that can be confusing (see myStockOptions.com Expands Tax Return Guidance).

To get those tax benefits, Cervino says, participants have to hold onto their shares for two years from the time of their enrollment in the offering and one year from the time of purchase. “You have to meet both of those requirements,” she adds, and the most common plan is a six-month plan. “So, employees enroll in the plan, accumulate payroll deductions for six months, and then they purchase shares. In a plan like that, that means employees have to hold the shares for 18 months after they purchase them.”

NEXT: Supplementing the retirement plan.

Most importantly, stock purchase plans are not designed to serve as a retirement savings vehicle, Cervino says, but they can supplement a retirement plan. “The availability of an employee stock purchase plan appears to be an effective way that companies can help their employees insulate their retirement savings.”

For example, she says, “We looked at clients that offered an ESPP with a 401(k) [and at clients that] offered a 401(k) and no ESPP. In that study, we analyzed the loan rates against the 401(k) plan. Where companies offered employee stock purchase plans in addition to a 401(k), we found lower loan rates across the board, regardless of company size.” The difference was especially notable among small companies with fewer than 500 employees: 9% of workers took out new 401(k) loans when an ESPP was also available, versus 14% at employers that only had a retirement plan. The percentage of participants with an outstanding loan was also lower at smaller companies with an ESPP, 14% versus 23%.

This makes sense, Cervino believes, because stock plans have a lot of liquidity associated with them. “Most plans don’t have any restrictions,” she says. “So, having an alternative savings path for employees that provides a liquid form of investment can help employees resist the temptation to take a loan against their 401(k).”

An earlier study from Fidelity found that more than half (57%) of participants with an ESPP intend to use those assets for retirement saving or later investment. Participants in stock plans also reported being strong savers overall, saving an average 18% of income among their retirement, personal, stock and other accounts.

“We have done a little bit of client-specific analysis on 401(k) and ESPP participation,” Cervino says. “Where we have done it, on a client-specific basis, we have found that participants who are participating in the ESPP are by and large maxing out their 401(k) match.”

If stock plan savers are more engaged with their finances overall, sponsors may look forward to stronger participant outcomes, and employers, too, may get a better work force out of making stock options available (see More Employees Value Stock Purchase Plans).

NEXT: ESPPs vs. company stock investment options.

“We have seen one other development in this space with regard to company stock,” she says, as companies are re-evaluating whether to offer stock on their investment lineup. The PLANSPONSOR 2015 Defined Contribution Survey found that while many large and mega plans offer employer stock in their retirement plan—21.2% and 43.4%, respectively—fewer than one in 10 micro, small and mid-sized plans include stock in their investment options—1.4%, 3.2% and 8.3%, respectively.

“Where companies are no longer offering company stock as an investment option, it means that there is no longer an easy path to employee ownership,” Cervino notes. “So, we have had some interest in employee stock purchase plans as an alternative path to employee stock ownership where it’s no longer available through the 401(k).”

However, one challenge to be wary of, Gray warns, is that the asset allocation of most 401(k) plans does not take into account participants’ equity holdings outside the plan. “If you have a large position in stock ownership, it may actually be presenting the wrong view as to how you should be invested in your 401(k),” he says. A more personalized advice and/or default solution could account for participants’ equity balance. “The key is ownership and integration,” he concludes. “Make that not only part of communication, but actually make it a part of the solution.”