According to the latest Bank of America Merrill Lynch
401(k) Wellness Scorecard
, throughout 2013 employees demonstrated positive savings behaviors in their 401(k) plan
. The report reveals year-over-year trends in plan participant behaviors, along with employers’ adoption of 401(k) design features in plans serviced by Bank of America Merrill Lynch. Key insights from the report include:
- Among employees who took action in their 401(k) plan last year, 76 percent took a positive action, such as starting or increasing contributions – a 3 percent increase compared to the prior year. Tracked quarterly, during the fourth quarter last year, 83 percent took a positive action, representing a three-year high.
- Health savings account (HSA) usage grew significantly in 2013. With rising healthcare costs and a growing number of employers offering HSAs alongside high-deductible health plans, more workers are using these tax-advantaged vehicles to prepare for qualified near- and long-term medical expenses. The number of employees holding a Bank of America HSA increased 56 percent last year to approximately 290,000.
“Thanks to advancements in the fields of medicine and technology, people today are preparing for a retirement that will likely be many years longer than any previous generation,” said David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch. “We’re committed to helping people live their best lives in retirement, which includes empowering them to get the most out of their benefits and to take greater control of their financial future.”
Employers increasingly adopt auto features and advice
Last year, employers continued to seek proactive ways to help their employees achieve their retirement goals and improve their overall financial wellness. Results from the report show that:
- The number of 401(k) plan sponsors adopting auto enrollment increased 16 percent in 2013, while the adoption of auto increase grew 25 percent.
- Last year also saw a 20 percent increase in the number of plans offering both auto enroll and auto increase features – demonstrating that employers seek to help employees get started as well as stay on the path toward a successful retirement.
- 401(k) plan sponsor adoption of Advice Access 2 increased 14 percent last year. Advice Access is a professional saving and investment advice service – offered online, via phone and in person – tailored to an employee’s life stage and individual situation. Nearly 600 plan sponsors now offer this service.
“During the last few years, it has been encouraging to see companies increasingly use intuitive plan design strategies and other services to make their 401(k) plans more accessible and easy to use,” said Kevin Crain, senior relationship executive for Bank of America Merrill Lynch. “When combined with simplified employee decision-making around enrollment, contributions and wise investing, employers can truly help drive better outcomes for their workforces.”