As of March 31, 2011, 12% of plans within BofA Merrill Lynch’s proprietary 401(k) business were utilizing Auto Enrollment and Advice Access, 10% of plans utilize both Auto Enrollment and Auto Increase, and 7% of plans utilize Auto Enrollment, Auto Increase and Advice Access. Its analysis found plans that incorporate multiple features or services designed to encourage positive plan participant behaviors show significantly greater results.
The average participation rate for plans that don’t use any of the services is 48%, compared to an average participation rate of 64% for plans that incorporate any two services and 76% for plans that include all three.
Year-over-year, BofA Merrill Lynch has seen a 12% increase in the use of Auto Enrollment, with more than 260 plans live with this feature; a 23% increase in the use of Auto Increase, with more than 140 plans now live; a 26% increase in plan usage of Advice Access, with more than 420 plans now live with this service. The analysis also found a 22% increase in participants utilizing Advice Access since March 2010.
Other findings from the 401(k) Contribution Activities Quarterly Scorecard include:
- Nearly 291,000 employees took a positive savings action in their 401(k) plan accounts in Q1 2011, compared to approximately 202,000 in Q1 2010.
- Among all participants who took some type of savings action during Q1 2011, 75% took a positive action (started or increased contributions), versus 25% who took a negative action (stopped or decreased contributions) – compared to 66% and 34% during Q1 2010, respectively.
- The percentage of plan participants who increased their contribution rate in Q1 2011 was 3 percentage points higher than those who took this action in Q1 2010, while the percentage of participants who started contributing was nearly 6 percentage points higher for the same period.