Bank of America Corp. (NYSE:BAC) has a major challenge this year in continuing on with their 401(k) enrollment program growth, as last year they had a big increase in enrollments, rising by about 15 percent to reach $81.5 billion.
Under the Retirement & Benefit Plan Services unit of Bank of America, the 401(K) enrollment goal this year is projected to grow significantly again, according to Kevin Crain, the head of institutional client relationships for the bank.
Crain noted in a recent interview the company expects a lot of new clients and assets being added to this segment in 2010.
Responding to expected skepticism, Crain laid out the strategy the company plans to employ to generated the projected business. How they will work it is to use the opportunity when people enroll in their health-care business to connect it to the 401(k) account the company offers.
While not quite the same as a bundled package, it seems to be something like that which Bank of America is going to try to use, in the sense of being able to look at the overall “financial wellness” of the business employees affected. Crain said they’re going to be rolling out a new tool soon for employers to get a good feel for how their people are doing financially, based on a number of different factors. Crain said, “By having a more unified offering, it really makes it easier to engage employees.”
Last year the growth in the 401(k) assets came from the tying in of healthcare enrollment to the 401(k), said Crain, and having the ability to automatically enroll was another factor in the growth.
“It is all about making these programs as easy as possible to get into,” Crain asserts. “People are overloaded with communication and generally this causes them to shy away.”
All of this sounds good, but it’s unconvincing at this time. Ease of use is always a good selling point, and it could cause some growth, but to imply the growth Bank of America enjoyed last year for 401(k) enrollment will continue this year is pretty hard to believe.
With little to hang their had on, Bank of America and others in the industry are looking for anything to put out there to create a positive outlook. The performance last year in this sector, while impressive, is no guarantee it’ll continue on this year, and with the economic situation really not changing at all, it’s highly unlikely we’ll see numbers even close to last year’s.
