Press release
T. Rowe Price: Latest Research Highlights How Employers Can Help Close Racial And Ethnic Retirement Savings Gaps With Financial Wellness
Employers have opportunity to address social inequality through defined contribution plans BALTIMORE, Aug. 24, 2021 /PRNewswire/ -- T. Rowe Price, a global
About this update from T. Rowe Price Group, Inc.
[{"type":"text","content":"Employers have opportunity to address social inequality through defined contribution plans\n\n\nBALTIMORE, Aug. 24, 2021 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, today released a series of white papers featuring findings from its sixth annual Retirement Savings and Spending survey focused on the financial attitudes and behaviors of 401(k) savers and retirees. Among the notable findings, the research found that Black and Latinx 401(k) savings rates are lower compared to their white counterparts. The median deferral rates were 5% and 8% for Black and Latinx participants, respectively, compared to 9% for white participants. Additionally, Black and Latinx respondents were more likely to cite having student loan, medical, and other types of debt, further impairing their ability to save for retirement. \nDC plans, such as 401(k)s, are one of the few places where access to financial advice, guidance, and education in support of lifetime financial goals is supported equally. This provides plan sponsors with a unique opportunity to directly address plan participation and savings gaps through the availability of financial wellness tools and services and better plan design.\nThe first step for employers may be as simple as seeking input from underrepresented minority employees about what would be helpful to improve financial wellness. Additionally, employers could also incorporate plan designs that prioritize participation, such as automatic enrollment, auto increase, or using incentives, such as matching employer contributions to increase contribution rates. \n\"Employers have an opportunity to promote diversity, equity, and inclusion in defined contribution plans and help address broader social inequality,\" said Dee Sawyer, head of Individual Investors and Retirement Plan Services at T. Rowe Price. \"Better understanding the challenges underrepresented groups face can help employers and financial professionals develop strategies to help ensure participants of all races and ethnicities thrive financially and retire successfully.\"\nAdditional findings from the research include:\nFifty-five percent of survey respondents believe, despite inadequate levels of saving, they are saving enough to enjoy a comfortable retirement. The remaining 45% are either aware they are not saving enough or...