Equity in Retirement Plans
At the PLANSPONSOR National Conference in Chicago, plan sponsors discussed innovative strategies to address disparities in savings and participation within retirement plans. With a focus on equity across race and gender, panelists highlighted the importance of understanding the participant pool and tailoring benefits to meet their needs.
Key Strategies and Findings
- Understanding Participant Needs:some text
- Pam Hess, executive director of the DCIIA Retirement Research Center, emphasized the importance of data. A collaboration with the Aspen Institute and Morningstar Retirement revealed significant savings gaps, such as a 55-year-old Black woman having only 36 cents saved for every dollar saved by a white man of the same age, even when controlling for salary and tenure.
- Automatic Enrollment and Immediate Vesting:some text
- Sal Naidoo from SEIU 775 Benefits Group shared how automatic enrollment for both full and part-time caregivers and 100% immediate vesting after six months of service help their diverse workforce start saving early. The plan also includes in-service distribution options to meet short-term financial needs.
- Demographic Surveys and Multilingual Support:some text
- SEIU 775 Benefits Group conducts demographic surveys to better understand their participants' needs and translates plan materials into at least eight languages, providing fully translated participant portals to ensure accessibility.
- Financial Wellness Initiatives:some text
- Beth Pattillo from Leidos Inc. discussed the company’s journey of data collection, revealing financial stress among employees despite their high education and compensation levels. Leidos found that Black and Hispanic workers contributed significantly less to their retirement plans at younger ages.
- Plan Adjustments and Educational Efforts:some text
- Leidos is exploring auto-enrollment and non-elective contributions for employees earning less than $90,000 a year. They also focus on positive communication strategies, highlighting the breadth of benefits rather than making employees feel inadequate for not meeting match contributions.
- Emergency Savings and Loan Repayment:some text
- Leidos leverages after-tax contributions for emergency savings and has implemented a modified student loan repayment program. The company is also exploring retirement income solutions to enhance financial security.
Plan sponsors at the PSNC 2024 conference demonstrated that addressing equity in retirement plans requires a multifaceted approach. By understanding participant needs, implementing automatic features, supporting diverse languages, and focusing on financial wellness, sponsors can help close the retirement savings gap and promote financial security for all employees.
