The Actual Deferred Percentage (ADP) is a vital metric that reveals the percentage of eligible employees within a company actively contributing to a deferred compensation plan, like a 401(k). This measure serves as an indicator of employee engagement and participation in the plan. Calculated by dividing the total sum of individual deferral percentages by the number of eligible employees, ADP offers valuable insights into the effectiveness and adoption of the company's retirement savings program. Understanding and monitoring ADP can help organisations assess employee financial wellness initiatives and identify opportunities for plan improvement.
