Bank of America Merrill Lynch's retirement services unit is generating significant new business, much of it from existing clients of the bank.

Last year the institutional retirement business racked up $17 billion in new retirement benefit plan assets, across the 401(k), pension and equity compensation plan markets. The momentum has carried over into 2011, according to the company.

As of the end of February, BofA Merrill Lynch had $12 billion of new funding commitments from 249 clients. Forty percent of these clients are existing clients of the bank—companies with ties to its Global Commercial Banking business or its Global Corporate & Investment Bank.

"We're by no means declaring victory," says Andy Sieg, head of BofA Merrill Lynch Retirement Services. "We're just scratching the surface in terms of the opportunity."

Sieg noted, for example, that the global commercial banking business serves one of every three midsize companies in the United States.

BofA Merrill Lynch credits the strengthening partnership between Bank of America Global Commercial Banking and the institutional retirement business. That cooperation led to $3.6 billion in new client benefit plan assets in 2010, compared with $700 million in 2009.

Last year's retirement business gains occurred even though economic challenges had distracted many employers from employee benefits issues. But Doug Dannemiller, senior analyst at research firm Aite Group LLC, said it's not surprising given the strength of the legacy Merrill sales force.

Overall, BofA Merrill Lynch's retirement services assets stood at $535 billion at the end of 2010, up from $489 billion at the end of 2009.

Its 401(k) assets, for all sizes of clients, stood at $118 billion at the end of 2010, a net increase of $14.5 billion from 12 months earlier.

During the recession, the market for retirement plan sponsors slowed considerably, as businesses focused on survival. But that's changed as the recovery begins to take hold, said Kevin Crain, head of institutional client relationships for BofA Merrill Lynch.

Part of the reason for that is the current legislative and regulatory focus on the cost and value of retirement plans, he says. "It has made sponsors realize that, at a minimum, they should know [the] marketplace."

One innovation that has boosted BofA Merrill Lynch's 401(k) business has been aligning it with employers' healthcare benefits. Presenting retirement savings as part of an overall health and financial wellness concept has led to an increasing number of workers taking positive action regarding their 401(k)s, according to Crain.

During last year's health benefit enrollment season, BofA Merrill found that, of 401(k) participants who took some type of action, 93% started or increased contributions. Seven percent stopped or lowered contributions. The results were an improvement on 2009, when 85% started or increased contributions and 15% stopped or lowered them.

As of the end of February 2011, assets within BofA Merrill Lynch's institutional retirement business—401(k), defined benefit, and SEP and Simple IRAs—stood at a single-month record of $186 billion.

Several hirings last year underline the firm's intent to boost retirement revenue. Rich Linton, formerly of Fidelity, joined in July as head of business retirement solutions.

Another Fidelity executive, Steve Ulian, jumped to BofA Merrill Lynch at the same time to head its institutional retirement and benefit solutions business. David Tyrie joined from Putnam in August to head the personal retirement solutions unit, and Eve Varner, of Monster.com, signed on in December to lead interactive platform management.