PLANADVISER - September/October 2017 - 23

Participants More Engaged
Robust plan design, education and digital tools are helping
EMPLOYERS are making it easier for
employees to take more control of their
finances by continuing to simplify
retirement plan design and expanding
the savings solutions they offer to
include Roth 401(k)s and health
savings accounts
(HSAs), according
to the latest Bank of America Merrill
Lynch Plan Wellness Scorecard.
" Backed by the financial wellness
solutions of Bank of America Merrill
Lynch, employers are able to give
employees access to the financial help
they want and establish a culture of
financial wellness. This engagement
growth has also been driven in part
by employers making education more
accessible with on-site meetings,
webcasts and personal consultations, "
the company says.
Among Bank of America Merrill
Lynch's proprietary 401(k) business,
the last year has seen a 6% increase in
new enrollments, a 17% increase in plan
assets, a 20% increase in contributions
and an 18% increase in deferral rate
changes. The majority of employees
in every age group actively contribute
to their 401(k) accounts, with younger
employees slightly more likely to do
so-82% of Millennials made a contribution,
as did 77% of Generation X and
75% of the Baby Boomers.
Nearly two-thirds of employees
say their employer has been at least
somewhat influential in getting them
to save for retirement. Employers that
are looking to help their employees
401(k) Strides in 2016
Increase
in plan assets
17%
Increase
in enrollment
6%
Source: Bank of America Merrill Lynch, Plan Wellness Scorecard
Increase
in contributions
20%
Increase
in deferral
rate changes
18%
save more and establish a culture
of wellness in the workplace are
embracing simplified plan features.
Automatic increase has become very
popular,
showing a 24% year-overyear
adoption growth rate and a 172%
increase since 2012.
The Scorecard finds that the higher
the automatic enrollment default rate,
the higher the levels of employees'
participation in their 401(k) plan.
-Rebecca Moore
Boosting Confidence
An effective program motivates employees to face their finances head-on
WORKERS throughout the U.S. are
struggling with managing their
finances, and that stress could spill
over, onto their company's bottom line.
According to a recent survey by
Mercer, employers could lose up to
$250 billion in wages for employees'
time spent distracted by money
issues. The firm finds that employees
on average spend about 150 work
hours worrying about finances each
year. On average, they spend about 13
hours per month doing so, with 16%
reporting they spend over 20 hours.
These situations could have dramatic
effects
on employee
engagement,
absenteeism, productivity and even
health care costs.
In response, more and more
employers are turning to financial
wellness programs. But while it is a
hot topic in the employee benefits
world, financial wellness is often difficult
to define. Mercer notes that financial
wellness is not just about having a
good grip on financial literacy and that
programs focusing on this concept
alone may fail to deliver. Instead, the
firm suggests that programs need
to improve what it calls " financial
courage, " or the confidence to engage
financial issues.
Mercer says certain tools can help
employees approach these challenges
in a simple way-i.e., one requiring
just a basic level of financial literacy.
The firm points to options such as
budgeting tools and coaching, credit
management assistance, student loan
refinancing programs and access to
non-retirement savings vehicles.
In addition, it also developed the
Mercer Financial Wellness Index. To
measure an employee's financial wellness,
the index focuses on criteria
including level of comfort in meeting
various financial obligations and level
of financial stress. -Javier Simon
planadviser.com september-october 2017 | 23
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PLANADVISER - September/October 2017

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