Employee Turnover Linked to Plan Participation Rates

May 8, 2006 (PLANSPONSOR.com) - A study from Charles W. Cammack Associates, Inc. (CWCA) indicates a link between employee turnover rates and retirement plan participation rates.

According to a CWCA news release, the study showed that the percentage of nonparticipating employees who terminated employment was more than double the percentage of those who chose to participate (25% to 10%, respectively).

This does not imply that increasing plan participation rates will increase employee retention rates, cautions Michael Webb, Vice President at CWCA in the release. Rather, the lack of retirement plan (and other benefit) participation could be a symptom of a lack of employee engagement with the employer, Webb said.

The study was based on 2004 compliance data collected from over 85 employers covering over 115,000 employees, and compared the turnover rates of employees who voluntarily participated and those who did not voluntarily participate in their employer’s retirement plan. CWCA plans to replicate the study using 2005 compliance data to see if year-over-year changes in participation rates impact turnover.

More information about the study can be obtained by contacting Michael Webb at (212) 227-7770.