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Where Do you Go for Financial Advice?
“Associating overall health and financial wellness creates a sense of urgency on the part of employees to engage in their plan,” BofA said. “When sponsors make it easier for employees to enroll in the plan and raise their contribution rates, employees are more likely to take action. Proof is in the numbers. In 2001, 90% of participants in Bank of America Merrill Lynch plans took positive action by either enrolling or increasing their contributions when health care and 401(k) events were connected.” BofA data shows that 25% of plans with automatic enrollment have higher average participation rates, and that 43% have higher participation rates among younger employees. Plus, 97% of employees who are automatically enrollment do not opt out—even with a higher default rate of 6%.Additionally, nearly one-quarter (23%) of the plans that BofA administers added the automatic increase feature in the past year.Education and individualized advice should also be an integral part of a retirement plan, BofA said. Bank of America Merrill Lynch’s 2012 Workplace Benefits Report found that 79% of employers anticipate greater employee demand for investment advice in their plans. Sprectrem research also found that 75% of plan sponsors would offer voluntary planning and advisory workshops, and that 70% of participants would take advantage of company-sponsored personal finance and investment services. BofA suggested that this advice go beyond retirement to cover “budgeting, home ownership, insurance, health care, college planning, estate planning, eldercare and offerings tailored to the unique needs of women.”
“Associating overall health and financial wellness creates a sense of urgency on the part of employees to engage in their plan,” BofA said. “When sponsors make it easier for employees to enroll in the plan and raise their contribution rates, employees are more likely to take action. Proof is in the numbers. In 2001, 90% of participants in Bank of America Merrill Lynch plans took positive action by either enrolling or increasing their contributions when health care and 401(k) events were connected.”
BofA data shows that 25% of plans with automatic enrollment have higher average participation rates, and that 43% have higher participation rates among younger employees. Plus, 97% of employees who are automatically enrollment do not opt out—even with a higher default rate of 6%.
Additionally, nearly one-quarter (23%) of the plans that BofA administers added the automatic increase feature in the past year.
Education and individualized advice should also be an integral part of a retirement plan, BofA said. Bank of America Merrill Lynch’s 2012 Workplace Benefits Report found that 79% of employers anticipate greater employee demand for investment advice in their plans. Sprectrem research also found that 75% of plan sponsors would offer voluntary planning and advisory workshops, and that 70% of participants would take advantage of company-sponsored personal finance and investment services. BofA suggested that this advice go beyond retirement to cover “budgeting, home ownership, insurance, health care, college planning, estate planning, eldercare and offerings tailored to the unique needs of women.”