The rate of positive decisionmaking was even higher, at 83%, during the fourth quarter of 2013, according to the latest release of the Bank of America Merrill Lynch 401(k) Wellness Scorecard, which identifies and examines trends within the firm’s book of retirement plan business. Examples of positive steps include such actions as establishing a 401(k) account or increasing deferral rates. Other positive steps include setting age-appropriate asset allocations or running an income needs calculation.
The 83% rate for positive actions observed in the fourth quarter of 2013 represents a three-year high, according to the report. The yearly rate of 76% represents a 3% increase in positive decisionmaking over levels measured in 2012.
Other major trends observed by the BofA Merrill Lynch 401(k) Wellness Scorecard include the following:
- Healthy uptick in HSA usage. Health Savings Account (HSA) usage grew significantly in 2013. With rising health care costs and a growing number of employers offering HSAs alongside high-deductible health plans, more and more workers are utilizing these tax-advantaged vehicles to prepare for both near- and long-term medical expenses.
- The mobile benefits frontier. The number of mobile visitors to benefit plan platforms supported by BofA Merrill Lunch doubled in 2013, according to the report.
- More making it automatic. The number of 401(k) plan sponsors adopting automatic enrollment increased 16% in 2013, while the adoption of automatic annual deferral increases grew 25%. BofA Merrill Lynch also observed a 20% increase in the number of plans using both auto-enroll and auto-escalation features.
Employers also continued to seek proactive ways to help their employees achieve retirement goals and improve overall financial wellness, the report suggests. For example, 401(k) plan sponsor adoption of advice services increased 14% during 2013.
“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,” says Kevin Crain, senior relationship executive for BofA Merrill Lynch. “When combined with simplified employee decisionmaking around enrollment, contributions and wise investing, employers can truly help drive better outcomes for their workforces.”
To access the Bank of America Merrill Lynch 401(k) Wellness Scorecard, click here.