Merrill Lynch Affluent Insights Quarterly Survey Examines the Critical Role Employers Play in Helping Employees Prepare for Retirement

Bank of America today announced findings from the latest Merrill Lynch Affluent Insights Quarterly, a survey of the values, financial priorities and concerns of affluent Americans. The most recent survey in this quarterly series explored affluent employees’ company loyalty, their reliance on employer-sponsored retirement vehicles when preparing for the future and desire for greater financial advice and guidance in the workplace.

According to the survey, other than compensation and promotions, retirement benefits are the next greatest factor keeping affluent employees loyal to a company (60 percent), significantly more so than even having a good boss (45 percent), a convenient commute (31 percent) or the option of flex time (30 percent). Comparable to the importance they assign to retirement benefits, these employees also cite health care benefits (58 percent) and simply enjoying what they do (58 percent) among top reasons for staying with their employer.

"In today’s world of high unemployment, it’s easy to forget that America’s long-term challenge will more likely be too few workers, not too few jobs,” said Andy Sieg, head of Retirement and Philanthropic Services for Bank of America Merrill Lynch. "As baby boomers begin to exit the workforce, employers will face an intensifying war for talent for which a new wave of innovation and creativity in the delivery of retirement and other benefits will be among the keys to winning. We already see some of the most dynamic employers enhancing their benefit offerings to further their competitive edge when attracting and retaining talent.”

For the majority of affluent employees, workplace retirement vehicles, such as 401(k) and 403(b) plans, are among the primary tools in which they save and invest for their future. According to the survey, more than half (54 percent) rely solely or heavily on retirement plans offered by their employers to meet retirement goals. However, among them, 60 percent do not contribute the maximum allotted amount to these accounts, inviting greater potential for retirement funding shortfalls and a need to retire later than they may have hoped. In fact, 45 percent of affluent individuals expect to retire later than they had originally planned, compared to just 29 percent in January 2010.

Affluent employees believe more could be done by their employer, including access to a financial professional who can offer personalized advice and guidance (26 percent), better financial education programs about how to save for retirement (24 percent), and education and advice about issues beyond retirement savings, such as budgeting, college savings plans and debt management (21 percent). Among affluent employees with access to financial education or advice services offered by their employer –particularly pertaining to their 401(k) or other workplace retirement plans – 77 percent take advantage of such value-added benefits.

"As the role employers play in helping employees reach their retirement goals continues to evolve, many are focused on ways to make it easier for employees to utilize their benefits plans in a more comprehensive and effective manner,” said Kevin Crain, head of Institutional Client Relationships for Bank of America Merrill Lynch. "In addition to the growing use of automatic enrollment and automatic increase features within 401(k) plans, companies are increasingly offering employees greater access to meaningful financial tools with advice and guidance, across multiple channels and from the earliest stages of their careers through their transition into retirement. We see the most successful retirement plans being those easiest for employees to understand and engage in transactions.”

Putting enough aside for retirement can be difficult and stressful, particularly for those hampered by the pressures of meeting everyday expenses and unexpected life events. According to the survey, 20 percent of affluent employees admit that stress about personal finances has caused them to be less productive on the job, contributing to their lack of focus, missing days of work, and treating or responding to co-workers in a negative manner.

When asked to consider the amount of time they spend managing their personal finances (e.g., portfolio management, investment research, paying bills, transferring funds, talking to a financial advisor), nearly one in five (17 percent) respondents spend 50 percent or more of this time while in the workplace, and nearly one in three (29 percent) spend at least 25 percent or more of this time while at work.

Among those affluent individuals who work with a financial advisor in or outside the workplace, the majority indicate that this person plays an important role in determining how to help them make the most of their 401(k) or other workplace retirement plans. In fact, among the two-thirds (66 percent) who turn to their financial advisor for help in this way cite doing so for such reasons as establishing the right asset allocation strategy within their plans (33 percent), adjusting this strategy at different life stages (26 percent), assisting with rollover upon leaving an employer (18 percent) and developing rollover or distribution strategies when preparing for retirement (20 percent).

"To help their employees save and invest more productively for their future, we’re delivering advice and guidance services and working with employers to develop programs that cut through confusion and make it easier for individuals to manage their entire financial picture. At every life stage and regardless of their wealth status, workers desire greater access to professional financial advice – which we believe should be a foundational aspect of more effective retirement benefit plan services offered in the workplace,” added Sieg.

Affluent Insights Quarterly Methodology

Braun Research conducted the Merrill Lynch Affluent Insights Quarterly survey by phone between June 11 and June 29, 2010 on behalf of Merrill Lynch Global Wealth Management. Braun contacted a nationally representative sample of 1,000 affluent Americans with investable assets in excess of $250,000, and oversampled 300 affluent Americans in each of 14 target markets including Atlanta; Boston; Charlotte; Chicago; Dallas; Los Angeles; Miami; Minneapolis; Orange County, Calif. (Irvine, Laguna Hills and Newport Beach); Philadelphia; Phoenix; San Francisco; St. Louis; and Washington, D.C. The margin of error is +/- 3.1percent for the national sample and +/- 5.7percent for the oversample markets, with both reported at a 95 percent confidence level.

Asset allocation and diversification do not assure a profit or protect against loss in declining markets.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with 5,900 retail banking offices, more than 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

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