Diversions December 6, 2012

Money Still Takes Back Seat to Family

Most Americans say they would be happier if they had more money, but few are willing to trade family time for bigger bucks.
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Even the promise of a 50% pay increase wouldn’t be enough for most Americans (71%) to spend less time with their children and families, according to the “Keep Good Going Report” by New York Life. Only 11% of 2,000 American adults surveyed said they’d trade time with their children for such a pay hike, and only one in five said they’d trade time with their spouse or partner.

A third would make the swap, however, for a “a significant amount of sleep each night, slightly more (35%) for “total vacation time,” 43% for “a favorite recreational activity/hobby,” 45% for time with friends and more than half (54%) would take the pay raise in exchange for evenings off from work.

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Not surprisingly, the economy has negatively hit Americans, the survey adds. Large majorities state that living a good life would be easier if they didn’t have to worry about bills (90%), were able to be financially self-sufficient in retirement (89%) and could protect their family financially “against life’s uncertainties” (89%).

The study also gave Americans an opportunity to rate their performance in four areas: family, personal life, work and community. Respondents said they were doing better in terms of having a loving relationship with their children than in other areas of family life.

Other areas of the survey covered areas such as having integrity, being considerate of others, and being polite and kind, where Americans also scored high. Respondents said they were doing in worst in such areas as achieving financial success, being politically active and participating in community events.

“The results show that, for the most part, Americans are acting on their values. More specifically, Americans find family and personal relationships as key to living a good life, and they are doing things in their day to day lives to reinforce this,” said Brian Perlman, a partner at Mathew Greenwald & Associates, which conducted the online survey in August.

Data & Research December 6, 2012

Only 33% of Small Businesses Offer Retirement Plans

Although 75% of small-business owners view their employees as family, cost considerations prevent them from offering a retirement plan.

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Small businesses’ decision to offer a retirement plan, be it a 401(k), SEP or SIMPLE plan, is based both on economic considerations as well as a sense of accountability, the Bank of America Merrill Lynch survey of 700 small-business owners found. Among those that offer a plan, 37% said they feel responsible for ensuring their employees have sufficient assets to sustain them in retirement. Another 29% said helping employees save for the future and addressing their employees’ financial wellness is important for their company, and 26% view it as a recruiting and retention tool.

Those who offer a retirement savings plan offer other benefits, as well, such as paid time off (86%), bonuses (83%), flex time or alternative work arrangements (67%), financial education or advice (36%).

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Among those who do not offer a retirement savings plan, only 18% said they were concerned about their employees having enough money in retirement. The most common reason why they do not offer a retirement savings plan is that employees have not asked for a plan (54%), followed by the belief they do not employ enough employees to warrant a plan (53%), it will not help the firm’s “personal economy” (39%), it is too expensive (37%), they do not want to be obligated to contribute (28%) and it’s simply too confusing (26%).

Rick Irace, head of institutional retirement and benefit solutions for Bank of America Merrill Lynch, said there was a small disconnect in the survey findings: 75% of small-business owners think of employees like family but then stop short of helping them prepare for retirement. “Just 37% of those that offer a plan feel a sense of responsibility,” Irace told PLANADVISER.

Irace also said that small-business owners would likely see improved profits if more than 30% viewed retirement plans as helping their employees be “financially fit—more focused and productive.”

Nearly half (49%) of the small-business owners who do not offer a retirement savings plan said the economy would have to improve before they would offer a plan, and 80% those business owners considering offering a plan within the next two years said cost is the biggest determining factor.

With 3.3 million small-business customers, Bank of America Merrill Lynch has made it a point of offering low-cost retirement plans to offset these concerns, Irace said. “We are committed to helping small businesses find the right retirement plan, to create loyalty between employee and employer,” he said. Already, since introducing an online, low-cost retirement plan called Merrill Edge Small Business 401(k) in March, the firm has opened more than 250 of these plans, Irace said. 

In addition to this platform, Irace said, the firm offers Advisor Alliance, which provides small businesses affordable recordkeeping and retirement plan administration services from a diverse selection of partners.

Bank of America Merrill Lynch also has more than 1,800 proposals to small businesses, Irace said. “This year, nearly 4,500 Merrill Lynch financial advisers, roughly one-third of our advisers, have delivered at least one retirement plan to a small business,” he said.

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