Just 53 per cent of Black employees and 45 per cent of Latino employees are participating in a U.S. workplace retirement plan, compared to 66 per cent of white employees and 62 per cent of Asian employees, according to a new survey by Voya Financial Inc.
The survey, which analyzed data from U.S. workplace retirement plans representing more than 163,000 plan members, found a retirement savings rate of eight per cent across all employees. However, savings rates among Black (7.1 per cent) and Latino (6.9 per cent) employees were still lower than those of white (8.4 per cent) and Asian (9.5 per cent) employee populations.
It also found white and Asian employees have an average retirement savings balance of US$99,000 and $86,000, respectively, while Black and Latino employees have an average of $45,000 and $43,000, respectively.
As expected, retirement plans featuring automatic enrolment have high active participation rates across all plan members, including 92 per cent for Asian employees, 90 per cent for white employees, 88 per cent for Latino employees and 87 per cent for Black employees.
By comparison, plans that don’t feature automatic enrolment have active participation rates of 49 per cent for white employees and 46 per cent for Asian employees, as well as just 34 per cent for Latino employees and 31 per cent for Black employees.
“Over the last several years, employers have increased their focus on driving greater inclusivity, which has led to positive outcomes in the recruitment and retention of a more diverse workforce,” said Rob Grubka, chief executive officer of workplace solutions at Voya Financial, in a press release. “Our research has found that employers can take this a step further by now focusing on opportunities to create greater value out of their benefits and savings programs by understanding and acting upon the unique needs of their employees.”