Seventy-five percent of 401(k) participants took positive savings actions — increasing their contributions or starting contributions — during the first quarter of 2011, well above the 66% rate for the first quarter of 2010, according to a Bank of America Merrill Lynch Retirement & Benefit Plan Services survey of client data that was released Wednesday.
The increase can be attributed to several factors, including greater automatic enrollment and automatic escalation, said company spokesman Matthew Card in an interview. Another factor was “recession-increased paternalism” by employers, said Mr. Card, referring to expanded efforts by sponsors to educate employees about retirement savings.
Twenty-five percent took a negative action — stopped making contributions or decreased contributions — during the quarter, vs. 34% taking negative action in the first quarter of 2010.
In the survey of 1,300 DC plans that are clients of Bank of America Merrill Lynch, Mr. Card said 263 sponsors offered auto enrollment during the first quarter, up 12% from a year ago. He added that 145 sponsors provided auto escalation during the first quarter of 2011, up 23% from the year-ago quarter.
The 1,300 plans tracked in the survey have about $95.8 billion in assets. The survey has been published quarterly for the last four years.