As plan sponsors increasingly incorporate features to coax them in, millennials — who have indicated in numerous surveys that they don't see much point in saving for retirement and are too raddled with student loan debt to contribute much — are apparently beginning to change their tune.
That's the word from the Bank of America Merrill Lynch 401(k) Wellness Scorecard, which shows that millennials are finally beginning to participate in employers' 401(k) plans.
The scorecard reported that not only are millennials enrolling in 401(k) plans for the first time — almost 40,000 just in the first half of 2014 alone, which is a 55 percent increase from the same period last year — they're also starting to use health savings accounts, now making up 23 percent of account holders.
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In fact, the scorecard said, "Millennials now make up 20 percent more of our total contributor population than they did at the midpoint of 2013."
Perhaps millennials' engagement with workplace benefits is more a function of a lower unemployment rate than simple scorn for benefits' potential, particularly since a work study done earlier in the year by Merrill Lynch and Age Wave reported that millennials expect to rely primarily on personal savings and income to fund their retirement.
The Merrill Lynch scorecard certainly agrees with that last millennial assessment, by the way, saying, "We believe they are likely to face considerable increases in longevity as well as health care costs by the time they reach retirement and are least likely to be able to rely on defined benefit plans."
But back to that participation rate. As the scorecard put it, "Strong trends among millennials for defined contribution plan enrollment and health savings account ownership suggest that plan sponsors have been successful in making the right features available that appeal to employees and make it easier for them to take the steps toward being financially well."
Some of those features include auto-enrollment and auto-escalation of contributions, while others are specifically designed to appeal to millennials — mobile apps that provide access to retirement plan data and action anywhere, any time.
While millennials also aren't the most trusting of the financial services industry, finding their efforts to reach out to them via social media "creepy," the reality is that millennials are far more reliant on social media than the generations before them, so in the end the strategy may be paying off.
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