ADP Employee Retirement Review
ADP is largely recognized as a significant payroll provider.
The firm provides retirement plans for employees that are appropriate for any small business.
The 401k Essential plan from ADP offers full-service plan management and straightforward pricing.
This evaluation is intended for HR specialists and small company owners who are thinking about using ADP as their employee retirement provider.
Many companies desire to contract with a firm that has the know-how and resources to relieve employees of the stress of managing their employee retirement plans. The top suppliers of employee retirement services, such as ADP, are capable of doing exactly that.
Retirement benefits are offered by ADP, a sizable, reputable payroll services provider, using an all-in-one platform. Additionally, the business provides employee retirement benefit accounts. It may be a practical and affordable solution for companies of all sizes.
| Transparent pricing | 85 |
|---|---|
| Low employee investment fees | 90 |
| Variety of plans | 80 |
| Customization | 100 |
| Integration with HR and payroll tools | 100 |
Why ADP Is Best for Small Businesses
It’s often a good idea to utilize a private payroll service provider if your company has employees. It is a simple method to streamline payroll, retirement, and health benefits whether you already use ADP or still require a payroll provider. By making employee account creation and management simpler, the 401k Essential plan makes it simpler to offer an employee retirement plan. ADP Run is another affordable payroll alternative. The company is unquestionably one of the top suppliers of employee retirement plans.
Pros
For companies of all sizes, ADP provides a range of investment alternatives and retirement account types.
The 401k Essential plan offers full-service retirement plan management and straightforward pricing.
The business provides a full range of tools and services for payroll, HR, and benefits.
Cons
For services other than its 401k Essential bundle, ADP withholds pricing information.
For companies that are able to manage retirement programs internally, the 401k Essential plan may be prohibitively expensive.
Plan Features
| Feature | 401(k) | 401k Essential |
|---|---|---|
| Employee mobile app and financial planning tools | Yes | Yes |
| Employee self-enrollment | Yes | Yes |
| SMARTSync Comprehensive Plan Automation | Yes | Yes |
| Administrative fiduciary support | No | Yes |
| Investment management support | No | Yes |
| Compliance readiness and testing | No | Yes |
| Government filings | No | Yes |
ADP provides companies with a 401(k) retirement plan that delegated responsibility for choosing and tracking investments over time to the corporate administrator. Plan administrators have access to technology and resources that aid with creating, implementing, and managing a corporate 401(k), as well as a professional ADP manager to assist with implementation (k). Through SMARTSync Comprehensive Plan Automation, ADP’s 401(k) plan may also be integrated with ADP’s payroll application and HR outsourcing solutions.
While relatively small firms with competence in investing and recordkeeping may find this to be a viable alternative, operating a retirement plan may be quite challenging for bigger organizations. These businesses could do better under the 401k Essential plan from ADP.
401k Essential
The 401k Essential plan from ADP delivers a fully-functional 401(k) with extra support for administration and compliance. The strategy is also totally adaptable, making it simple to change any element to suit the requirements of your company. Customized automatic enrollment choices, employee eligibility standards, employer contributions, vesting timelines, and safe harbor policies are all included.
Large organizations looking for efficiency and automation will find ADP’s 401k Essential plan to be a fantastic fit due to the effectiveness and peace of mind that these enhanced services provide. Although sometimes more expensive, it is comparable to the fully managed programs that ShareBuilder 401k provides. In fact, ShareBuilder 401k is our top choice for cheap costs; for more details, check our review of ShareBuilder 401k.
Additional Features
Support and onboarding: Each ADP plan administrator has access to a dedicated ADP manager who assists with the deployment of retirement services. This service is competitive with most suppliers for employee retirement.
Automation: Current ADP payroll and all-in-one HR clients may interface their payroll system with 401(k) plan recordkeeping systems using SMARTSync Comprehensive Plan Automation from ADP. This functionality can help administrators save time, increase accuracy, and lower the chance of making compliance mistakes.
Co-fiduciary or investment management services are available to businesses through financial services provider Mesirow. Alternative sources for investment fiduciary services include ADP’s subsidiary, ADP Strategic Plan Services LLC. Either choice can relieve your company’s HR staff of the burden of choosing and overseeing investments while lowering the chance of an IRS or Department of Labor audit.
Compliance: To assist your company with staying on top of compliance standards without running the risk of bias, ADP offers impartial recordkeeping services. The 401(k) Essential plan covers federal filings as well as compliance preparedness and testing, reducing the risk of compliance-related mistakes.
Online resources: ADP clients have access to a significant library of online resources to aid in the administration of plans, the fulfillment of tax and compliance obligations, and the selection of investments. There are resources for payroll, recruiting and hiring, and other employee perks because ADP is a full-service HR platform.
Mobile app: Employee enrollment is made simpler with the ADP mobile app. Employees may estimate their retirement savings and make future plans with the integrated MyADP Retirement Snapshot tool. ADP triumphs over ShareBuilder 401k in this regard since it has no mobile app at all.
Employee resources: In addition to using the ADP mobile app, employees may benefit from the ADP Achieve financial wellness program and employee education materials. In order to provide plan members with individualized insights and benchmarking so they may make wiser investment decisions, the organization also makes use of the data from employee records.
Types of Accounts
There are several types of employee retirement plans available to businesses who pick ADP as their supplier for employee retirement benefits. The IRS has established certain rules and restrictions for each plan.
ADP provides a 401(k) plan, wherein plan administrators are responsible for choosing and overseeing investment alternatives as well as managing compliance-related concerns. The 401k Essential plan, which offers more extensive customization, administration, and compliance help, is another option available to business owners.
SIMPLE IRA: Compared to a 401(k), ADP’s SIMPLE IRAs have lower administration costs, starting at $480 annually, and fewer compliance requirements. Additionally, there are no prerequisites for participation. Notably, Paychex, ADP’s primary name-brand rival in the HR services and benefits market, also provides SIMPLE IRAs.
SEP IRA: Small company owners and self-employed people who desire variable contribution levels and no necessary compliance filings can choose a SEP IRA from ADP. Due of Human Interest’s lack of retirement plans for independent contractors and company owners, ADP has an advantage over them. However, for pricing, Human Interest is our top selection; read our Human Interest review to find out why.
Customer Service
Automation solutions simplify the administration of an ADP retirement plan beyond setup and deployment by linking the platform with a company’s already-existing ADP payroll and HR services. Additionally, a client administrator help website is available with frequent queries answered.
Employees may also access a number of frequently asked questions about customer service to quickly get solutions and the best contact details. ADP’s mobile app and the MyADP Retirement Snapshot calculator are two more tools and resources for education.
On its website, ADP provides a variety of ways to contact it. We like how accessible the business is to both present and potential clients.
Investment Options
Companies that use ADP to provide employee retirement plans have access to a variety of investment choices, such as the following:
- cash market
- Mutual funds for stocks and income
- Lifestyle funds and index funds
- investment vehicles with a focus on real estate and technology
- Socially conscious stock funds
Bonds backed by Treasury Inflation-Protected Securities (TIPS)
Although ADP offers the majority of the standard investment choices found in employer-sponsored retirement plans, the selection of individual funds is limited. We thought that the investment alternatives offered by Human Interest and USA 401k, two of the retirement suppliers we investigated, were more openly disclosed. Whether ADP permits businesses to provide employee stock purchase plans through their retirement accounts is another question.
Overall Value
We advise using ADP for…
- All types of small businesses, but particularly those who utilize ADP to handle their payroll and other HR requirements.
- Large enterprises that require assistance in meeting their recordkeeping and IRS compliance obligations.
We do not advise using ADP for… - small companies that can manage strategies internally.
- Businesses that want completely open pricing so may choose employee retirement vendors wisely.
