10 industries with the worst-performing 401(k) plans

1. Accommodation and Food Services

The accommodation and food services segment once again finished in 27th place out of 27 industries. The 13,237 companies saw a 38% decline in average account balance, to $17,521.

Employee contributions rose by $778 (about 55%), and employer contributions were up by 5%.

As an industrial group, this segment had a "notably outsized decline" in average account balance, being 10% more than the next highest industry surveyed. The 38% decrease is twice what the S&P 500 gave back during the plan year.

The authors say they are forced to assume that this industry saw some major turnover, with older workers who had higher balances leaving the plan and being replaced by younger workers with little or no balance.

Also of note, employee contributions rose by an "enormous amount," but even with this improvement, the industry still has the least amount of employee contributions.

Credit: Shutterstock

10. Contractors

The contractors segment rose a single position this year, up to 18th out of the 27 industrial groupings. The 37,231 companies saw a 21% decline in average account balance, to $42,442.

Employee contributions per participant rose by $477, or about 13%, compared to the previous plan year. Meanwhile, employer contributions were down by 2%.

The number of workers covered by this industry declined from about 1.87 million to 1.76 million, down approximately 6%. This makes contractors one of the industries most affected by headcount reduction on a percentage basis.

The report authors speculate that high interest rates, high material costs and lower demand all likely played a part in the shrinking of this industry. The 1.76 million workers who remain are enrolled in plans that, while they may be below average, are by no means the worst performers.

Credit: Adobe Stock

9. Information and Media

The information and media segment plunged five places this year, finishing at 19th.

The 12,627 companies saw a 25% decline in average account balance, to $40,538. Employee contributions were relatively flat, falling by $105 (about 2%) compared to the previous plan year. Employer contributions, however, were down significantly, decreasing by 33%.

The number of workers covered by this industry grew from about 3.07 million to 3.19 million, an increase of approximately 4%. This makes information and media sixth overall in headcount growth from the 2021 plan year.

Information and media lost the most ground in rate of return, falling from second last year to 27th this year.

Credit: Adobe Stock

8. Retail

The retail segment rose two places this year, up to 20th. The 37,283 companies saw a 22% decline in average account balance, to $42,257.

Employee contributions actually rose by $557 (about 18%) compared to the previous plan year. However, employer contributions were down by 11%. The number of workers covered by this industry shrank 3%, from about 7.8 million to 7.5 million.

The $557 per head increase coupled with the loss of almost 300,000 workers from the sector suggests that those employees were younger workers who were not contributing to the plan.

The authors say the retail industry has once again delivered an "almost puzzlingly strong score" in the employee longevity factor, overcoming the fact that many hourly or seasonal workers don't reach minimum service requirements for participation.

Credit: Adobe Stock

7. Other Services

After holding the 20th position in the three previous years, the "other services" segment fell to 21st this year. This segment includes a variety of employers, including auto repair, house cleaning services, barber shops and laundromats.

The 36,744 companies saw a 20% decline in average account balance, to $33,074. Employee contributions per participant rose by $349 (about 16%), while employer contributions were down by 22%.

The number of workers covered by this industry grew 2.5% from about 1.48 million to 1.52 million.

Credit: Adobe Stock

6. Arts, Entertainment & Recreation

The arts, entertainment and recreation segment rose two places this year, up to 22nd. The 8,970 companies saw a 25% decline in average account balance, to $39,023.

Employee contributions rose by $457 (about 15%), while employer contributions fell by 25%. The number of workers covered by this industry held steady, growing from about 835,000 to 838,000.

The two bright spots for this industry were the overall rate of return of negative 16.36% and employee longevity, both of which were in the top half of the industries surveyed. The average account balance declined by 25%, while the overall rate of return posted only a 16% decline.

This suggests that more money left the plan via retirement cashouts than can be accounted for simply by the assets losing value during a down year in the market.

Credit: Adobe Stock

5. Transportation and Warehousing

The transportation and warehousing segment rose three places this year, finishing 23rd. The 14,458 companies saw a 30% decline in average account balance, to $30,423.

Employee contributions per participant rose by $547 (about 20%), while employer contributions were down by 9%. The number of workers covered by this industry grew by 150,000, from about 2.62 million to 2.78 million, for an increase of 6%.

According to the report, the decline in average account balance is the result of both a rough year for the S&P 500 and the growth in new plan participants who begin their 401(k) with low account balances. Transportation was one of seven industries tracked that not only added workers but also added a substantial amount of new companies.

Credit: Adobe Stock

4. Admin Support and Waste Management

The admin support and waste management segment fell one position this year, down to 24th. The 19,253 companies saw a 23% decline in average account balance, to $30,986.

Employee contributions rose by $633 (about 20%), but employer contributions fell 12%. The number of covered workers grew from about 1.77 million to 1.81 million (about 2%).

The standout metric for this industry is in the employee contributions, which at a median of $3,769 per worker comes in at 19th out of our 27. Most of the other performance metrics are clustered at around 23rd or 24th.

Credit: Adobe Stock

3. Health Care and Social Assistance

The health care and social assistance segment fell four places this year, down to 25th. The 37,458 companies saw a 26% decline in average account balance, to $25,820.

Employee contributions rose by $273 (about 10%), but employer contributions fell 21%. The number of workers covered by this industry was flat, decreasing by only about 40,000 workers to 6.47 million.

As a group, this industry has one of the most even distributions across the eight plan size cohorts analyzed. This means that more workers are covered by medium-sized plans, which tend to have lower participation rates and account balances.

For these companies, there is a steep drop from the micro segment of 85.6% participation to about 66% for the sponsors with between 26 and 5,000 participants This distribution of companies will make it difficult for this industrial group to advance in future years.

Credit: Adobe Stock

2. Educational Services

The educational services segment fell one spot to 26th. The 6,713 companies saw a 22% decline in average account balance, to $23,688.

Employee contributions per participant rose by $332 (about 12%), but employer contributions were down by 31%. The number of covered workers dropped 5% to 549,000.

According to the authors, it is important to note what educational services does and does not cover. Public school teachers and other school employees are generally not offered traditional 401(k) plans or even ERISA-qualified 403(b)s. As such, companies in the report represent a combination of private for-profit schools, tutoring services, test prep and other ancillary work around the education system.

Credit: Shutterstock Adobe Stock

1. Accommodation and Food Services

The accommodation and food services segment once again finished in 27th place out of 27 industries. The 13,237 companies saw a 38% decline in average account balance, to $17,521.

Employee contributions rose by $778 (about 55%), and employer contributions were up by 5%.

As an industrial group, this segment had a "notably outsized decline" in average account balance, being 10% more than the next highest industry surveyed. The 38% decrease is twice what the S&P 500 gave back during the plan year.

The authors say they are forced to assume that this industry saw some major turnover, with older workers who had higher balances leaving the plan and being replaced by younger workers with little or no balance.

Also of note, employee contributions rose by an "enormous amount," but even with this improvement, the industry still has the least amount of employee contributions.

Credit: Shutterstock

10. Contractors

The contractors segment rose a single position this year, up to 18th out of the 27 industrial groupings. The 37,231 companies saw a 21% decline in average account balance, to $42,442.

Employee contributions per participant rose by $477, or about 13%, compared to the previous plan year. Meanwhile, employer contributions were down by 2%.

The number of workers covered by this industry declined from about 1.87 million to 1.76 million, down approximately 6%. This makes contractors one of the industries most affected by headcount reduction on a percentage basis.

The report authors speculate that high interest rates, high material costs and lower demand all likely played a part in the shrinking of this industry. The 1.76 million workers who remain are enrolled in plans that, while they may be below average, are by no means the worst performers.

Credit: Adobe Stock

9. Information and Media

The information and media segment plunged five places this year, finishing at 19th.

The 12,627 companies saw a 25% decline in average account balance, to $40,538. Employee contributions were relatively flat, falling by $105 (about 2%) compared to the previous plan year. Employer contributions, however, were down significantly, decreasing by 33%.

The number of workers covered by this industry grew from about 3.07 million to 3.19 million, an increase of approximately 4%. This makes information and media sixth overall in headcount growth from the 2021 plan year.

Information and media lost the most ground in rate of return, falling from second last year to 27th this year.

Credit: Adobe Stock

8. Retail

The retail segment rose two places this year, up to 20th. The 37,283 companies saw a 22% decline in average account balance, to $42,257.

Employee contributions actually rose by $557 (about 18%) compared to the previous plan year. However, employer contributions were down by 11%. The number of workers covered by this industry shrank 3%, from about 7.8 million to 7.5 million.

The $557 per head increase coupled with the loss of almost 300,000 workers from the sector suggests that those employees were younger workers who were not contributing to the plan.

The authors say the retail industry has once again delivered an "almost puzzlingly strong score" in the employee longevity factor, overcoming the fact that many hourly or seasonal workers don't reach minimum service requirements for participation.

Credit: Adobe Stock

7. Other Services

After holding the 20th position in the three previous years, the "other services" segment fell to 21st this year. This segment includes a variety of employers, including auto repair, house cleaning services, barber shops and laundromats.

The 36,744 companies saw a 20% decline in average account balance, to $33,074. Employee contributions per participant rose by $349 (about 16%), while employer contributions were down by 22%.

The number of workers covered by this industry grew 2.5% from about 1.48 million to 1.52 million.

Credit: Adobe Stock

6. Arts, Entertainment & Recreation

The arts, entertainment and recreation segment rose two places this year, up to 22nd. The 8,970 companies saw a 25% decline in average account balance, to $39,023.

Employee contributions rose by $457 (about 15%), while employer contributions fell by 25%. The number of workers covered by this industry held steady, growing from about 835,000 to 838,000.

The two bright spots for this industry were the overall rate of return of negative 16.36% and employee longevity, both of which were in the top half of the industries surveyed. The average account balance declined by 25%, while the overall rate of return posted only a 16% decline.

This suggests that more money left the plan via retirement cashouts than can be accounted for simply by the assets losing value during a down year in the market.

Credit: Adobe Stock

5. Transportation and Warehousing

The transportation and warehousing segment rose three places this year, finishing 23rd. The 14,458 companies saw a 30% decline in average account balance, to $30,423.

Employee contributions per participant rose by $547 (about 20%), while employer contributions were down by 9%. The number of workers covered by this industry grew by 150,000, from about 2.62 million to 2.78 million, for an increase of 6%.

According to the report, the decline in average account balance is the result of both a rough year for the S&P 500 and the growth in new plan participants who begin their 401(k) with low account balances. Transportation was one of seven industries tracked that not only added workers but also added a substantial amount of new companies.

Credit: Adobe Stock

4. Admin Support and Waste Management

The admin support and waste management segment fell one position this year, down to 24th. The 19,253 companies saw a 23% decline in average account balance, to $30,986.

Employee contributions rose by $633 (about 20%), but employer contributions fell 12%. The number of covered workers grew from about 1.77 million to 1.81 million (about 2%).

The standout metric for this industry is in the employee contributions, which at a median of $3,769 per worker comes in at 19th out of our 27. Most of the other performance metrics are clustered at around 23rd or 24th.

Credit: Adobe Stock

3. Health Care and Social Assistance

The health care and social assistance segment fell four places this year, down to 25th. The 37,458 companies saw a 26% decline in average account balance, to $25,820.

Employee contributions rose by $273 (about 10%), but employer contributions fell 21%. The number of workers covered by this industry was flat, decreasing by only about 40,000 workers to 6.47 million.

As a group, this industry has one of the most even distributions across the eight plan size cohorts analyzed. This means that more workers are covered by medium-sized plans, which tend to have lower participation rates and account balances.

For these companies, there is a steep drop from the micro segment of 85.6% participation to about 66% for the sponsors with between 26 and 5,000 participants This distribution of companies will make it difficult for this industrial group to advance in future years.

Credit: Adobe Stock

2. Educational Services

The educational services segment fell one spot to 26th. The 6,713 companies saw a 22% decline in average account balance, to $23,688.

Employee contributions per participant rose by $332 (about 12%), but employer contributions were down by 31%. The number of covered workers dropped 5% to 549,000.

According to the authors, it is important to note what educational services does and does not cover. Public school teachers and other school employees are generally not offered traditional 401(k) plans or even ERISA-qualified 403(b)s. As such, companies in the report represent a combination of private for-profit schools, tutoring services, test prep and other ancillary work around the education system.

Credit: Shutterstock Adobe Stock

1. Accommodation and Food Services

The accommodation and food services segment once again finished in 27th place out of 27 industries. The 13,237 companies saw a 38% decline in average account balance, to $17,521.

Employee contributions rose by $778 (about 55%), and employer contributions were up by 5%.

As an industrial group, this segment had a "notably outsized decline" in average account balance, being 10% more than the next highest industry surveyed. The 38% decrease is twice what the S&P 500 gave back during the plan year.

The authors say they are forced to assume that this industry saw some major turnover, with older workers who had higher balances leaving the plan and being replaced by younger workers with little or no balance.

Also of note, employee contributions rose by an "enormous amount," but even with this improvement, the industry still has the least amount of employee contributions.

Credit: Shutterstock

Instant Insights /

10 industries with the worst-performing 401(k) plans

1. Accommodation and Food Services

10. Contractors

9. Information and Media

8. Retail

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7. Other Services

6. Arts, Entertainment & Recreation

5. Transportation and Warehousing

4. Admin Support and Waste Management

3. Health Care and Social Assistance

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2. Educational Services

1. Accommodation and Food Services

10. Contractors

9. Information and Media

8. Retail

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7. Other Services

6. Arts, Entertainment & Recreation

5. Transportation and Warehousing

4. Admin Support and Waste Management

3. Health Care and Social Assistance

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2. Educational Services

1. Accommodation and Food Services

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Instant Insights /

10 industries with the worst-performing 401(k) plans

Related: Top 10 industries with the best-performing 401(k) plans

John Manganaro

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