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Simplified plan features support culture of financial wellness

New research indicates employees believe their employers are influential in getting them to contribute toward retirement. Simplified features are not only making it easier for employees to take control of their finances, they are also fueling steady growth in engagement and enrollment.

With plan features such as auto-enrollment and auto-escalation, more employees are participating in their employer-sponsored retirement plans, and at higher deferral rates. In addition, more than 97% of auto-enrolled employees don’t opt out. Surprisingly, the higher the automatic enrollment default rate, the higher the participation level.

The number of employers offering a Roth option in their 401(k) is increasing. A Roth option allows employees to contribute taxable dollars today, helping to establish a potentially tax-free income stream in retirement. Employees under age 40 make up nearly 57% of those contributing to a Roth 401(k) account.

There has been a significant increase in Health Savings Account (HSA) participation as employees are turning to HSAs as a way to help manage their health care expenses in retirement. In one year’s time, from 2015-2016, the number of employees contributing to an HSA increased 21% and HSA account balances increased 36%.

Perhaps not so surprising is that employees’ value technology as an important resource for managing retirement accounts. Enrollment, beneficiary changes, and contribution rate changes are the most common reasons employees are accessing their accounts online.

Employers play an important role in how well prepared employees are for retirement. Adopting the following best practices helps support a culture of financial wellness.

  • Take time to evaluate plan design. Consider features like auto-enrollment and auto-increase to encourage employee participation.
  • Encourage use of digital tools as a complement to in-person meetings. Online resources make it easier for employees to take an active role in managing their finances.
  • Consider offering a Roth 401(k) option, which allows employees to contribute how they want and potentially mitigate the impact of future tax increases.
  • Consider adding a Health Savings Account to the benefits package. An HSA can provide employees with a way to manage health care expenses today and in the future.

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.


  1. NAPA, “Automatic Plan Features Help Participants Engage
  2. 2017 Plan Wellness Scorecard, Bank of America Merrill Lynch