Are employers stepping up to the plate when it comes to providing employees with retirement savings opportunities?
For the second year, the ADP Research Institute® examined the types of companies — by size and type of industry — that offer retirement benefits, as well as the retirement savings behaviors of approximately 10 million U.S.
Among the key findings:
Just 1/3 of small companies (those with less than 20 employees) offer retirement benefits, compared to nearly 98 % of companies employing 5,000 or more workers.
By industry, the percentage of companies offering retirement benefits varied from manufacturing (67 percent) to leisure and hospitality (23 percent).
As employees drew closer to retirement age, more participated in their plan offering. Overall participation rates increased from 41.1 percent for employees aged 20-24 years to 65.6 percent for employees aged 55+.
Similarly, salary deferral rates increased with age, with employees aged 20-24 years deferring on average 4.6 percent of salary and employees aged 55+ deferring on average 8.5 percent of salary. The pattern of older workers saving more held true for both genders.
Consistent with 2013, participation and savings rates varied widely by industry. For example, 74.5 percent of information sector employees were saving for retirement — more than double those employed in the leisure and hospitality industry.
Regardless of industry, the proportion of employees saving for retirement continued to increase with company size. As in 2013, savings rates declined as company size increased. But irrespective of company size, a higher proportion of workers at higher compensation levels saved at a higher rate.
When considering compensation groups individually, the research once again showed that in most compensation categories not only were more females saving for retirement than males; they also were saving at slightly higher rates.