OREANDA-NEWS. November 25, 2016. As 401(k) plan engagement continues to rise, new data from Bank of America Merrill Lynch shows how plan design can be critical to encouraging positive savings behaviors, especially among millennial participants. According to the latest Plan Wellness Scorecard1, 24 percent more employees are enrolled and contributing to their company’s retirement savings plan in the first half of 2016 compared to last year, and millennial participants (ages 21–34) generated more contribution rate increase activity during the first half of 2016 than any other age group.

The latest semiannual report underscores how intuitive and automated financial benefit plan features may increase employee participation and contributions. For example, 46 percent of new enrollments were generated by employers’ use of simplified enrollment, including auto-enrollment (up 33 percent since 2015) and Express Enrollment (up 42 percent since 2015). Higher auto-enrollment default rates have also supported a rise in participation, in addition to the use of auto-increase, which is up 41 percent since last year and 153 percent since 2012.

The report reveals distinctively different savings behaviors between younger (ages 21-27) and older millennials employees (ages 28-34). Older millennials are significantly more likely to participate in a company’s retirement savings plan than younger members of the generation (60 percent vs. 38 percent). However, smart benefit plan design can significantly improve the participation of both age groups. For instance, among plans with auto-enrollment participation rates increased to 78 percent among younger millennials and 88 percent among older millennials. Mobile technology is also a key driver of millennial engagement. Fifty-five percent of all mobile enrollments are completed by a participant in the 21- to 34-year-old age range. 

“We’re continuing to see millennials take control of their finances and be more proactive with retirement as they recognize the implications of living longer as well as the benefits of saving early,” said John Quinn, head of Institutional Product and Platform Management at Bank of America Merrill Lynch. “Having the right plan design features leveraged by engagement practices can shape employees’ long-term investment strategies, as well as improve participation among younger generations.”

The report’s findings revealed ways employers can increase employee participation and improve plan design, particularly with younger participants, including:

  • Adopt simpler processes. Auto-enrollment can be implemented on a plan level and should not be limited to new hires.

  • Implement an automatic increase feature. Auto-increase can help employees save more over time and can be aligned with annual pay increases or cost of living adjustments.

  • Work with your plan provider. Engaging plan providers can give employers a full range of resources, including offline and digital enrollment and account management tools, to allow every employee to engage with the plan how they want.


“As more employers look to help improve their employees’ financial awareness through a wellness program, utilizing smart design features is an effective tool to guiding their employees on the right path,” added Quinn.

For more findings from the Bank of America Merrill Lynch Plan Wellness Scorecard and actionable advice for plan sponsors, click here.

1 The Plan Wellness Scorecard monitors plan participants’ behavior and sponsors’ adoption of new plan design features and services in our proprietary 401(k) business, which comprises \\$169.9 billion in total client plan assets and 3.028 million total plan participants with positive balances as of June 30, 2016.* Source: Bank of America Merrill Lynch’s Retirement and Benefit Plan Services (Retirement and Benefit Plan Services) is part of Global Wealth and Investment Management (GWIM), the wealth and investment management division of Bank of America Corporation. As of June 30, 2016, Retirement and Benefit Plan Services had client balances of \\$169.9 billion. Client Balances consists of assets under management, client brokerage assets and deposits of GWIM retirement plan participants held at Bank of America, N.A. and affiliated banks.


Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 47 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with approximately 34 million active accounts and more than 21 million mobile active users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation (“BofA Corp”). Banking activities may be performed by wholly owned banking affiliates of BofA Corp, including Bank of America, N.A., member FDIC. Brokerage services may be performed by wholly owned brokerage affiliates of BofA Corp, including Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC.