How does a 401k work: Plans that meet your business needs

ADP delivers benefits across your business with easy administration and interactive resources to keep employees engaged.

ADP® Retirement Services Capabilities

See how ADP® can help you create a retirement plan that is smart and easy for your business. We have no investment bias.

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ADP Mobile App

Learn how the ADP Mobile App helps employees unlock the full potential of their retirement savings plan.

ADP is transforming the way people save for retirement

Every employee’s vision for retirement is different. Each will have questions to answer and decisions to make. At ADP we provide resources to help them get started and take control of their plan.

From financial education to useful tools like the MyADP Retirement Snapshot®1, we help participants understand how to think about the future and design a path to get there.

We make enrollment easy and provide a dashboard that gives each participant a clear view of their plan. Add targeted messaging that provides important information and employees find themselves both more connected to their plan and able to see the benefits of having it.

A wide array of unbiased investment choices

Making the best possible investment decisions for your plan is critical to its success. Whether your advisor is providing investment advisory services or you are considering hiring a third party for this support, ADP offers two distinct options for selecting investments:

  • Our open-fund architecture provides access to over 13,000 nonproprietary investment options from 300+ investment managers. You and your advisor can compare and evaluate funds to find the right candidates for consideration.
  • Our screened investment tiers put simplicity at the forefront by offering fund tiers that have been evaluated and are organized based on ADP’s underwriting criteria.2

In both options, as an independent record keeper, ADP is able to provide investment options without any bias or agenda.

A separate, indirect subsidiary of ADP, Inc., ADP Strategic Plan Services, LLC provides fiduciary investment management services. including the analysis, selection, monitoring, and if necessary, replacement of investment options on behalf of employer-sponsored retirement plans.

Control risk and reduce your fiduciary burden

Today, the Employee Benefits Security Administration, part of ERISA, is actively overseeing, and ensuring the integrity of, the private employee retirement system in the U.S. Sponsoring a retirement plan makes your company responsible for the investment selection and monitoring associated with your plan. That’s often more than most small or midsized companies want to take on. ADP can help you reduce this “investment fiduciary burden”.

  • For plans working with an advisor, Mesirow Financial offers co-fiduciary or investment manager services, depending on the support needed.3
  • For plans not working with an advisor, ADP's affiliate, ADP Strategic Plan Services, LLC, is available.4

Flexible plan designs that are easy to set up

Whether you are looking to establish a new retirement plan or move your plan to ADP, we can help you design a plan that meets the needs of your workforce and answers questions like:

  • At what age should my employees be eligible to participate in the plan?
  • How long should employees work for me before qualifying to join the plan?
  • Should my employees have access to a third-party online investment advisory service?
  • Is a Safe Harbor plan a good choice for my company?
  • Should the plan offer employees a Roth 401(k) option?
  • Would my employees benefit from automatic enrollment?

And when it comes to implementation, we make it easy, with a specialized ADP manager to help ensure the process runs smoothly.

ADP® Retirement Services Implementation

See how as a plan administrator you’ll have access to smart, flexible technology and tools, as well as an experienced, responsive team.

Seamless payroll integration with SMARTSync®

For companies using ADP payroll and HR solutions like RUN Powered by ADP® and ADP Workforce Now®, SMARTSync is an efficient way to connect ADP’s payroll and 401(k) plan record-keeping systems. In a recent survey, ADP customers reported real benefits:

  • 86% saw time savings5 by greatly reducing manual data entry requirements
  • A majority claimed reduced compliance concerns6 due to preset programming that manages tasks and checks for errors

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Resources and insights

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Video: How Financial Wellness Programs Can Improve Employee Engagement and Retention

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Addressing financial challenges to meet retirement income needs

  1. IMPORTANT: MyADP Retirement Snapshot(R) makes no assumptions about your tax status or savings and should not be used as the basis for any planning decisions. The likelihood of various savings outcomes are hypothetical, do not reflect actual investment results or market fluctuations and are not guarantees of future results. Results may vary potential savings scenarios, with each use and over time.
  2. EBSA Fact Sheet 10/14/2020
  3. Fiduciary services are provided through Mesirow Financial Investment Management, Inc., (“MFIM”) an SEC-registered investment advisor. Mesirow Financial is not affiliated with ADP, Inc. or its affiliates. Mesirow Financial refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates. The Mesirow Financial name and logo are registered service marks of Mesirow Financial Holdings, Inc. Advisory Fees are described in MFIM Form ADV Part 2 Mesirow Financial does not provide legal or tax advice. The specific instances in which a party may be entitled to indemnity are set forth in detail in the agreement between the plan sponsor and Mesirow Financial, and nothing herein is intended to modify that agreement.
  4. Investment advisory and management services provided through ADP Strategic Plan Services, LLC, an SEC registered investment advisor (SPS). Registration does not imply any level of skill or training. SPS affiliates may also receive fees paid by manufacturers or distributors of the investment options included in this product in connection to other professional services provided by the applicable SPS affiliate. The advice provided by SPS is in no way related or contingent upon the payment received for these other services. SPS and its affiliates do not offer investment, tax or legal advice to individuals. SPS is not acting and does not purport to act in any way as an advisor or in a fiduciary capacity vis-a-vis any plan beneficiaries. It is strongly suggested that any prospective client obtain independent advice in relation to any investment, financial, legal, tax, accounting or regulatory issues discussed herein. Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument or other market or economic measure.
  5. Service Integration Analysis - Small Market; Retirement Insights, LLC, February 2018.
  6. Ibid

    Unless otherwise disclosed or agreed to in writing with a client, ADP, Inc. and its affiliates (ADP) do not endorse or recommend specific investment companies or products, financial advisors or service providers; engage or compensate any financial advisor or firm for the provision of advice; offer financial, investment, tax or legal advice or management services; or serve in a fiduciary capacity with respect to retirement plans. Investment options are available through the applicable entity(ies) for each retirement product.

    Investment options in the “ADP Direct Products” are available through either ADP Broker-Dealer, Inc. (ADP BD), Member FINRA, an affiliate of ADP, Inc., One ADP Blvd, Roseland, NJ or (in the case of certain investments) ADP, Inc. Only licensed representatives of ADP BD or, in the case of certain products, of a broker-dealer firm that has executed a marketing agreement with ADP, Inc. may offer and sell ADP retirement products or speak to retirement plan features and/or investment options available in any ADP retirement product and only associated persons of ADP Strategic Plan Services, LLC (SPS) may speak to any investment management or advisory services provided by SPS or any third party in connection with such ADP retirement products. SPS is a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or services. Nothing in these materials is intended to be, nor should be construed as, advice or a recommendation for a particular situation or plan. Registered representatives of ADP Broker-Dealer, Inc. do not offer investment, tax or legal advice to individuals. Please consult with your own advisors for such advice. ADPBD-2019620-0810