Why ADP is Best for Small Businesses
Many employee retirement plan providers are only interested in selling to larger clients and tailor their services and pricing structures accordingly. As a result, many SMBs owners struggle to find plans that fit within their budgetary constraints or offer the flexibility they need. ADP is a notable exception and it’s our choice as the best employee retirement service for small businesses.
We love how ADP offers such a wide range of retirement plans to employees including traditional 401(k), individual or solo 401(k), SIMPLE IRA, SEP IRA, safe harbor 401(k), and Roth 401(k). Just like with Paychex, we were impressed at how well their intuitive online platform integrates payroll and retirement plan services. The firm has clearly invested a lot of time and effort into its excellent mobile apps that make it easy for employees to enroll in the plan and manage their accounts. This simplicity could help employers to boost participation rates, a challenge for many SMBs. We should also note how ADP provides dedicated managers to assist companies with implementation and ongoing administration of the retirement plans. For SMB owners spinning many different plates and lacking HR expertise, the support the ADP provides is excellent.
![ADP 401k overview](https://images.business.com/app/uploads/2019/12/13074642/adp-401k.png)
Employees can drill down into their 401k and pensions on ADP. (Source: ADP)
ADP Pricing
ADP requires clients to get in touch with them for a tailored quote.
They offer the following three service levels on their 401k packages:
Plan |
Number of employees |
Features |
ADP 401k Essential |
1-49 |
- Simplified plan administration
- Real-time payroll integration with ADP Smartsync®
- 3(16) administrative fiduciary and 3(38) investment management services
- Financial wellness tools
- Auto-enrollment
- Award-winning ADP Mobile App
|
ADP 401k Enhanced |
50-99 |
As Essential plus:
- Customizable plan design and investment options with no proprietary funds required
- Streamlined compliance process
- Access to an expert service team, TPAs and 3(16) fiduciary services
- 3(21) and 3(38) investment management services available
- Personalized insights based on extensive employee data
|
ADP 401k Premium |
100+ |
As Enhanced plus:
- Dedicated client service manager for to administer your plan
- Personalized guidance from a relationship manager
- Support for mergers, acquisitions and spin-offs with an ERISA consultant
- Employee communication program managed by a dedicated retirement communication manager
- Educational resources including webcasts, microsites, and videos
- Fully integrated HCM platform
- Specialized support for private equity firms and profit-sharing plans
|
ADP charges employers a monthly investment service fee of 0.10% of covered assets subject to a minimum $20.83. You may be able to offset the costs of setting up, administering and contributing to the plan but this depends on the plan you choose and the number of employees enrolled.
ADP Advantages
- The range of retirement plans available to employees is one of the broadest for a vendor that’s focused on servicing smaller businesses.
- For small business owners inexperienced with HR or pension plan management, having a support team available at implementation and beyond is very helpful.
- The mobile app is particularly well executed, which may lead to much greater participation in your program.
ADP Disadvantages
- ADP doesn’t list prices on its website and requires that you make contact with one of their sales reps. This complicates the process of comparing and contrasting competing quotes.
- The company receives many glowing reviews online from customers. However, the tone of the bad reviews suggests that the company sometimes poorly mishandles situations.
- Although accredited by the Better Business Bureau to A+, there have been nearly 350 complaints about the firm in the past 12 months.
ADP user score
ADP scores highly on TrustRadius with a score of 7.9 out of 10 for its Workforce Now package which allows employees and employers to manage retirement plans. One reviewer commented that “adjusting retirement strategies is simple and easy” while another noted that their firm now uses “ADP Workforce Now from recruiting to retirement”
Click here for our full ADP review