Participants More Engaged

Employers are making it easier for employees to take more control of their finances by continuing to simplify retirement plan design and expanding the savings solutions they offer to include Roth 401(k)s and health savings accounts (HSAs), according to the latest Bank of America Merrill Lynch Plan Wellness Scorecard.

“Backed by the financial wellness solutions of Bank of America Merrill Lynch, employers are able to give employees access to the financial help they want and establish a culture of financial wellness. This engagement growth has also been driven in part by employers making education more accessible with on-site meetings, webcasts and personal consultations,” the company says.

Among Bank of America Merrill Lynch’s proprietary 401(k) business, the last year has seen a 6% increase in new enrollments, a 17% increase in plan assets, a 20% increase in contributions and an 18% increase in deferral rate changes. The majority of employees in every age group actively contribute to their 401(k) accounts, with younger employees slightly more likely to do so—82% of Millennials made a contribution, as did 77% of Generation X and 75% of the Baby Boomers.

Nearly two-thirds of employees say their employer has been at least somewhat influential in getting them to save for retirement. Employers that are looking to help their employees save more and establish a culture of wellness in the workplace are embracing simplified plan features. Automatic increase has become very popular, showing a 24% year-over-year adoption growth rate and a 172% increase since 2012.

The Scorecard finds that the higher the automatic enrollment default rate, the higher the levels of employees’ participation in their 401(k) plan.