As 401(k) plan engagement continue to rise, so does participation among Millennials. The “Plan Wellness Scorecard,” a recent report by Bank of America Merrill Lynch, finds that among the 24% increase in employees that enrolled and contributed to their company’s retirement savings plan during the first half of 2016, Millennial participants (those aged 21 to 34) produced more contribution rates than any other age group.
While included in the same generation, the report reveals unique and dissimilar savings behaviors among older (ages 28 to 34) and younger (ages 21 to 27) Millennials. For example, older Millennials are increasingly more likely to participate in their employer’s retirement savings plan than younger ones, at 60% versus 38%, respectively. Once a plan features auto-enrollment, however, participation in younger Millennials jumps to 78%, versus 88% of the age group’s older members.
“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,” says 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.”
More information on the scorecard can be found here.