A recent report by Hewitt Associates has found that while the majority of employers have been slow to adopt Roth 401(k) plans, a number of employees will indeed sign up for the Roth 401(k) when it’s offered–particularly those workers who are younger and newly enrolling in a retirement plan.
Hewitt looked at more than 60,000 employees at companies that offered Roth 401(k) plans and found the average adoption rate was 8% after just three months of availability. About 14% of participants in their 20s elected the Roth 401(k) when it was available, and nearly a quarter (24.7 percent) of employees who were newly enrolling in the 401(k) plan chose the Roth 401(k) option, the study found. Hewitt’s study also found that when a Roth 401(k) was offered, the average contribution rate for newly eligible employees was approximately the same amount as it was before the Roth 401(k) was available.