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In Practice May 12, 2008
Merrill Lynch Sees Strong Adoption of Roth 401(k)
The Merrill Lynch Retirement Group reported that among the 1,700 plans on its proprietary recordkeeping system, almost 200 (12%) had added a Roth 401(k) option as of the end of March.
Reported by Rebecca Moore
The Roth 401(k) is particularly popular among professional service firms, including medical practices, law firms, and consulting agencies, according to an analysis by Merrill Lynch. The company saw a 21% increase in plans adopting a Roth 401(k) feature in the first quarter of 2008, and 25% of those plans were sponsored by professional service firms.
Merrill Lynch said more than 13,000 participants (6% of those eligible plans offering the option) are contributing to a Roth 401(k) account, which was up 37% in the first quarter of 2008. The company’s total assets in Roth 401(k) accounts are $70 million, with $28 million contributed in the first three months of this year.
Almost 20% of plans with the Roth 401(k) option have participation rates of 10% or more, and 10% of the plans have participation rates of 20% or more, the company said.