Are Auto Features Moving Millennials?
A new survey suggests that Millennials are “getting it” when it comes to retirement savings — or maybe as newer hires, they’re just “automatic” beneficiaries.
Regardless, during the first half of 2014, the number of first-time contributors among Millennials jumped 55% during the first half of the year, compared with 37% among the overall population, according to the latest Bank of America Merrill Lynch 401(k) Wellness Scorecard
. The report notes that Millennials now make up 20% more of the organization’s total contributor population than they did a year ago.
On the plan sponsor front, the BAML report noted that:
• During the 12-month period ending June 30, 2014, the number of 401(k) plans combining auto enrollment and auto escalation grew 19% compared with a year earlier.
• Nearly all employers (94%) that added auto enrollment during the first half of this year also added auto escalation, compared with 50% that did so during the same period last year.
• There was a 63% increase in the number of plan sponsors adding voluntary auto escalation to their plans during the past 12 months, and there was a 27% increase in the number of participants taking advantage of this feature.
BAML also noted that participant usage of their Advice Access service increased 8% year-over-year (June 30, 2013 to June 30, 2014), to nearly 210,000 users — 34% of whom are Millennials, and 26% of whom are Baby Boomers.
The 401(k) Wellness Scorecard is based on the Bank of America Merrill Lynch proprietary 401(k) business, which comprises $128.9 billion in total client plan assets and 2.5 million total plan participants as of June 30, 2014.