More employees eligible for 401(k) plans took “positive” action in the first half of this year than a year earlier, according to a survey by Bank of America Merrill Lynch's Retirement and Benefit Plan Services unit.
The survey said 233,122 employees took a “positive savings action” — enrolled in a 401(k) plan or raised their contribution rate — in the first half of 2010, compared with 226,372 in the same period in 2009.
Among employees who took some savings action during the first six months of this year, 67% took a positive step while 33% took a negative step, such as reducing or stopping contributions, the survey said. For the first half of 2009, 58% took positive action and 42% negative.
The positive responses reflect employee confidence and “the fact that employers are more focused on how to make the process easier,” Kevin Crain, head of institutional client relationships for Bank of America Merrill Lynch, said in an interview. Auto enrollment and auto escalation are two examples of how sponsors make retirement investing easier for participants, he said.
The quarterly survey is based on records of about 1.4 million participants in approximately 1,500 plans for which Bank of America Merrill Lynch is a record keeper.
For the three months ended June 30, the survey said, 47,198 raised their contributions, an increase of 6% from the same period in 2009. The number of employees enrolling in 401(k) plans for the first time was 53,375, down less than 1% from the second quarter of 2009.
In addition, 24,086 stopped contributing, a decline of 14% from the year-ago period, while 23,988 reduced their contributions, a decline of 9%, the survey said.