When Claudia Brant, a Latin Grammy-winning recording artist, arrived in the United States in 1998 from Argentina, she had never heard of 401(k) plans.
“I didn’t know anything about it,” she said in a video series featured on the Spanish-friendly ICanRetire microsite that Service Employees International Union 775 Benefits Group made available to the 80,000 participants in its retirement savings plan. Brant lamented the fact that many Hispanic Americans still aren’t aware of the prevalent workplace plans.
“People don’t know that 401(k) plans exist,” she said. “There are not a lot of institutions that have people who speak Spanish who can really approach the Latin Hispanic communities to let them know what the options are.”
She and Grammy and Latin Grammy-winning fellow musician Cheche Alara touched on myriad cultural and educational problems facing the Hispanic community in saving for retirement.
It’s difficult for many Hispanic-Americans fleeing from poverty, wars and situations that are extremely unsafe to think about saving for retirement 30 years down the road, Cheche said.
“If you make a buck, chances are you’re going to want to spend it on something that gives you joy,” he said. “It’s sad as hell, but it’s the truth.”
SEIU 775 Benefits Group, a nonprofit that provides training, benefits and other services to caregivers, introduced the microsite in May to better engage its Hispanic workers and educate them about retirement savings opportunities. Hispanic caregivers make up about 13% of the participants in its $285 million 401(a) plan, said Josh Luskin, managing director of the SEIU 775 Secure Retirement Trust at SEIU 775 Benefits Group.
The 401(a) plan is a defined contribution retirement plan that consists only of employer contributions. To supplement the 401(a) plan, SEIU encourages workers to open an individual retirement account with the Washington Retirement Marketplace, a state-run online IRA exchange.
“We have a very strong focus on retirement readiness and equity,” Luskin said, explaining that certain racial groups face greater retirement savings hurdles than others.
“Retirement hurdles aren’t all equal,” he said, referring to obstacles such as income and language or communication barriers that impede workers’ ability to save. “Depending on the different populations, there’s overexposure to some of those retirement hurdles.”
As awareness of racial disparities in retirement savings has grown, employers and their service providers are upping their efforts to mitigate the gap, according to industry observers. Some are looking at their educational materials and providing them in additional languages, such as SEIU has done. Others are engaged in detailed data analysis to better understand how different groups are using employer retirement plans. Still others are using diversity-oriented employee resource groups to reach targeted minority populations.
Employers are worried about racial disparities, said Katie Hockenmaier, U.S. defined contribution research director at Mercer. “We’ve had a number of conversations with different plan sponsors about this topic and they absolutely are concerned about it,” she added.
Hockenmaier explained that some plan sponsors are looking at the issue more closely than others with concern concentrated in certain sectors such as retail.