A looming presidential election and fiscal cliff were not enough to dissuade employees from taking positive savings actions in their 401(k)s, according to Bank of America Merrill Lynch’s latest quarterly numbers for its retirement and benefit plan services business.
For the quarter ending
The latest results mean that almost 490,000 employees have started or increased their retirement savings in Bank of America Merrill Lynch’s plans since the beginning of the year. The firm currently serves 2.5 million plan participants who have money in their retirement accounts. The total assets in those client plans is
The consistency of the contributions this quarter—even as economic concerns mounted with presidential election and fiscal cliff—points to an a long-term positive behavioral trend in place since 2009. That trend comes as plan sponsors are working with
Since 2009, the plans have seen a 42% uptick in the use of the auto increase feature, which automatically increases the amount an employee contributes to their retirement plan. The firm has also seen a 43% increase in the number of participants defaulting or auto enrolling in their Advice Access program, a tool that provides personalized savings and investment advice.
“The plan sponsors are doing their job about getting these plans set up structurally, so employees can easily engage initially, stay engaged ongoing and even increase engagement in terms of savings behaviors,” Crain said.
The plan sponsors have also increased their engagement in the plans since 2009, according to Crain. More plan sponsors have increased the use of auto increase over auto enroll over that time. At the same time, more have worked to boost their initial default savings rates from 3% to as much as 6% to start.
Those actions by plan sponsors have led to more positive behaviors from employees when it comes to retirement savings, said
“It really appears that they’re thinking of this in terms of their long-term retirement goals and futures and contextualizing the decisions they’re making around participation deferral rates, this notion that my time horizon is long,” Liersch said. “It is not based on one particular election, and I think that is encouraging.”
|Copyright:||(c) 2012 Financial Planning. All rights Reserved.|
|Source:||Source Media, Inc.|