Even those workers contributing a decent amount of money to their company-sponsored plans aren’t likely to meet their income needs for retirement, the Hewitt study finds.

For the scores of large companies fighting to increase participation rates in their 401(k) plans, there’s new information that certainly won’t help their cause: Even those workers contributing a decent amount of money to their company-sponsored plans aren’t likely to meet their income needs for retirement.

In fact, the vast majority of workers—roughly 80 percent—at large corporations will not be able to stash enough cash to adequately support themselves during retirement, according to a new study from benefits consulting firm Hewitt Associates.

Hewitt examined the account balances and saving habits of 1.8 million employees at 72 large companies. Factoring in inflation and increases in medical expenses during retirement, the report estimates that employees will need to replace an average of 126 percent of their salary at retirement just to make ends meet.

And yes, that means workers will essentially have to draw a higher income during retirement than they did during their working years, according to the Hewitt analysis, largely because fewer companies are now offering health care coverage to retirees.

Employees who are actively contributing to their companies’ 401(k) plans can get close to fully replacing their incomes during retirement—but they’ll still fall well short of what Hewitt considers to be an adequate savings level. Workers who put an average of 8 percent of their salaries into their 401(k) over the course of their careers can replace 96 percent of their pre-retirement income at age 65, according to Hewitt, or roughly 80 percent of what the firm deems necessary to battle inflation and rising health care costs.

The outlook, however, is significantly worse for employees who ignore their 401(k) altogether. These workers will only be able to replace slightly more than half of their final salary during retirement. (Hewitt also considered Social Security payments and any defined-benefit coverage an employee may receive, in addition to 401(k) savings.)

"At this point, it is not clear whether employers or employees fully realize the extent to which employees need to change their behavior to compensate for the changes to traditional employer-provided defined-benefit and retiree medical programs, and to address increasing retiree medical costs," the Hewitt report states.

Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.