Finally get that promotion? Get exclusive content, tips and tools to help you excel.
Implicit bias occurs when individuals make judgments about people based on gender, race or other prohibited factors without even realizing they’re doing it.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Plan sponsors also linking retirement plans with health savings accounts
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Retirement plan sponsors are promoting mobile technology to engage their employees and combining automatic enrollment with automatic contribution increases, according to the latest
401(k) Wellness Scorecard from Bank of America Merrill Lynch. As a result, they are seeing high participation rates from traditionally hard-to-reach groups.
In other key findings, more employees are opening health savings accounts to pay for future medical expenses, and more Millennials are participating in 401(k) plans.
The scorecard, released in October and based on more than 2.5 million participant accounts managed by Bank of America Merrill Lynch, revealed that during the first half of 2014:
• HSA use is climbing. Health savings account (HSA) enrollments grew 33 percent, as more workers use these tax-advantaged vehicles to prepare for near- and long-term medical expenses. Although Baby Boomers (38 percent of new account openings) and members of Generation X (39 percent) are most likely to have HSAs, some Millennials (23 percent) also find these accounts attractive.
• Millennials are prioritizing the future. More Millennials enrolled in their employer’s 401(k) plan for the first time during the first half of the year—a 55 percent increase over the same six-month period last year. Across all generations, the report found a 37 percent increase among first-time contributors.
• More employers are making saving automatic. The number of 401(k) plans combining auto enrollment and annual auto escalation of employee contributions grew 19 percent compared to one year earlier. Also, nearly all employers (94 percent) who added auto enrollment during the first half of 2014 also added auto escalation, compared to 50 percent during the same period last year.
“Seeing younger generations more vigorously engaged with workplace savings vehicles is encouraging,” said David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch. “These actions represent significant steps toward achieving long-term financial wellness in an era of rising health care costs, increasing longevity and self-reliance due to fewer pension plans.”
Mobile Participation on the Rise
The scorecard shows employee use of smartphone apps and mobile benefits platforms to manage their retirement accounts increased 41 percent in the first half of 2014. “Participants want to receive education and information about their benefit plans, along with tools to better manage their finances, in a manner that reflects their on-the-go lives,” said Tyrie.
“Plan sponsors often find mobile access to plan information to be the ideal way to reach Millennials, as well as hard-to-engage employees such as those in industries with limited access to desktop computers,” he pointed out.
An Integrated Approach
The trends in employee behaviors revealed by the scorecard were consistent with insights from an ongoing series of retirement studies by Merrill Lynch and consultancy Age Wave, which studies issues related to an aging workforce. In particular, a 2014
retiree health study found that health care expenses were employees’ top financial concern for later life, which makes planning for them an essential part of retirement preparation. In addition, a recent
work during retirement study found that Millennials expect to rely primarily on personal savings and income to fund their retirement.
“By further integrating how employees save for retirement and long-term health care costs, employers can help people see a more complete picture of their financial wellness and make informed choices,” said Steve Ulian, head of intuitional business development for Bank of America Merrill Lynch.
Video: Tying 401(k)s and HSAs Together Kevin Crain, senior relationship executive at Bank of America Merrill Lynch, says more employers are tying their 401(k) and HSA plan investment menus together to create a long-term savings mentality for employees.
The scorecard report advises plan sponsors to consider the following:
• Encourage enrollment by addressing by addressing
the needs of different generations—and providing relevant information about the
benefits of long-term savings.
•Combine automatic enrollment with automatic contribution increases, which in tandem significantly increase employee savings rates.
• Take advantage of mobile technology to help employees interact better with their plans.
• Integrate health care and retirement plan enrollment so employees can prepare for their long-term financial needs holistically.
• Promote education and awareness by offering employees access to seminars, webcasts and additional information, empowering them to take charge of their financial wellness.
A separate October 2014 report by consultancy Cammack Retirement Group looked at trends in higher education retirement plans at more than 100 private colleges and universities. The
2013-2014 Higher Education Retirement Plan Survey revealed a continuing move toward investment streamlining, with 65 percent of plans now offering fewer than 50 investments, up from 62 percent in 2012.
“Streamlining investment lineups, a trend that has increased year-over-year, simplifies decision-making for participants and the investment monitoring process for plan sponsors,” said Jeff Levy, managing partner at Cammack Retirement, in a statement accompanying the findings.
The survey also found that 9 out of 10 higher education institutions now use some sort of investment advisor, a significant increase from 71 percent in 2011 and 77 percent in 2012. In addition, nearly half of advisors serve as plan fiduciaries, up from 25 percent in 2010.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
SHRM Annual Conference & Exposition
SHRM’s HR Vendor Directory contains over 3,200 companies