ADP SUMMER, 2014 | Vol. 24 No. 1                 
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» Talent Management – Competitive Edge
» Compliance Functions
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» High Cost of
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» Capitalize on Redefined Employee Relations
Increase Retirement Savings Plan Participation
» Avoid 10 Common Interviewer Mistakes
» Strategies to Comply With ACA Employer Mandates
» ADP® Enhancements to
Midsized Company Platform
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New study identifies opportunities for employers to increase retirement savings plan participation

First the bad news: Despite the tax advantages of defined contribution plans, workers are not contributing – or they are saving too little, too late.

And now the good news: A recent study by the ADP Research Institute® suggests ways to improve that. The study looked at how retirement savings behavior differs by age, gender, compensation level, and industry. It was based on anonymous, aggregated payroll data for approximately 9 million U.S. employees.

Key findings include:

  • As retirement nears and becomes more of a reality, saving for it becomes a higher financial priority. Yet, by the time employees attempt to “catch up,” their greatest investing advantage has already passed them by – the ability to take advantage of compounding earnings over the entirety of their working career. This reinforces the importance of educating younger workers.
  • Regardless of company size, more employees in higher-wage groups participate – and contribute more. This suggests that education efforts directed to lower-wage workers could have a significant impact.
  • Participation rates differed dramatically between large and small companies (38% in companies with fewer than 20 employees vs. 71% in companies with 1,000 or more employees). This discrepancy may reflect the greater prevalence of automatic plan solutions like auto-enrollment, along with retirement education, advice programs, and online resources more commonly offered by larger companies. Smaller companies may want to explore ways to provide similar features.

        Click here to download the full report.

       Click here for an infographic summary
       of key report findings.

“By comparing their workforces’ savings rates to the benchmarks in this study,” the authors conclude, “employers can evaluate their current benefit strategies and target areas for improvement.”

ADP® helps simplify all aspects of retirement plan administration and compliance. Contact an ADP® Retirement Services District Manager at 800-432-401k or visit

ADP®, LLC and its affiliates do not offer investment, financial, tax or legal advice, or management services. Nothing in these materials is intended to be, nor should be construed as, advice or a recommendation for a particular situation or plan. Please consult with your own advisors for such advice.