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Data & Research September 2, 2011
Survey Finds Increased Efforts to Save for Retirement
Bank of America Merrill Lynch’s latest 401(k) Contribution
Activities Scorecard shows that as of June 30, 2011, nearly 1.5 million
participants are actively contributing to their 401(k) plans.
Reported by Rebecca Moore
Nearly 142,000 employees took a positive savings action (started or increased contributions) in their 401(k) plan accounts in Q2 2011, compared to approximately 101,000 in Q2 2010. Year-to-date, over 359,000 employees have taken positive savings actions through end of Q2 2011, compared to approximately 233,000 through end of Q2 2010.
Among all plan participants who took some type of savings action during Q2 2011, 72% took a positive action (started or increased contributions), versus 28% who took a negative action (stopped or decreased contributions) – compared to 68% and 32% during Q2 2010, respectively.
The percentage of employees who started contributing to their plan in Q2 2011 was 3 percentage points higher than those who took this action in Q2 2010, and 5 percentage points higher through the first half of 2011 compared to the same timeframe in 2010. In addition, Bank of America Merrill Lynch found, the percentage of plan participants who increased their contribution rate in Q2 2011 was 2 percentage points higher than those who took this action in Q2 2010, and 3 percentage points higher through the first half of 2011 compared to the same timeframe in 2010.
During the last four years, the firm has seen a 68% increase in the total number of eligible employees actively participating in plans that have been consistently on our platform since June 2007. The largest increases during this time were among participants under the age of 30 and those 60 and older.(Cont...)
More Employers Offering Advice
According to Bank of America Merrill Lynch’s latest 401(k) Contribution Activities Scorecard, the company has seen a 25% increase in plan usage of Advice Access, with nearly 440 plans now live with this service, and a 20% increase in participants utilizing Advice Access since June 2010. In addition, there has been a 22% increase in the use of Auto Increase, with more than 150 plans now live with this feature.
BofA Merrill Lynch reported a 7% increase in the use of Auto Enrollment, with more than 260 plans live with this feature.
The Scorecard report said that throughout the debt ceiling debate and recent market volatility, approximately 1% of total 401(k) plan participant call volume into the Bank of America Merrill Lynch Retirement Contact Centers reflected concerns specific to these issues. During the heightened market volatility the week of August 8th, the firm also saw a very small percent of total participants in clients’ plans (less than 1%) execute fund transfers in their accounts.