Today, NCLR (National Council of La Raza), with support from The
Prudential Foundation, released a report, “Enhancing Latino Retirement
Readiness in California.” The report found that compared to other
racial/ethnic groups, Latinos in California are the least likely to work
for an employer that offers a retirement plan. The report also revealed
that even among Latinos who have access to a plan at work, participation
and savings are relatively low.
NCLR’s report also finds that Latinos make up the largest share of
workers who could benefit from the California Secure Choice Retirement
Savings Program. There are 3.8 million Latinos in California who lack
access to a workplace retirement plan.
“California’s makeup represents the future of America, making our state
the ideal place to seek solutions to growing economic inequality,” said
Delia de la Vara, Vice President, NCLR California Region. “Our study
shows that California has the opportunity to prevent a national
retirement crisis by expanding options for Latinos and others to save
for retirement in the workplace.”
More than half of all working-age Americans are unprepared for a
financially secure retirement, leaving the nation vulnerable to a
retirement savings crisis. The NCLR report adds to the growing body of
evidence demonstrating that the looming crisis would disproportionately
affect Latinos.
California is widely considered a harbinger of national demographic
changes. More than 39 percent of the state’s population is Latino.
Latinos are projected to account for most of the growth in the American
workforce between 2010 and 2050.
“At Prudential, we’re committed to helping Latinos and other underserved
communities plan for both their retirements and overall financial
security along the way,” said Harry Dalessio, Senior Vice President of
Sales and Strategic Relationships at Prudential Retirement. “Helping
these communities prepare for retirement is a positive for all of us—our
communities, our company and the economy will be stronger and more
successful if everyone is more financially secure.”
“Financial education and coaching must go hand in hand with workplace
retirement plans,” said Maggie Cervantes, Executive Director of NEW
Economics for Women, a nonprofit community development corporation and
NCLR Affiliate in Los Angeles. “It is vitally important that Latinos
understand the importance of saving for their retirement as studies have
shown that Latinos, especially Latinas, in California live longer than
any other ethnic group.”
Passed into law in 2012, Secure Choice would provide Individual
Retirement Accounts (IRAs) for workers whose employers do not offer a
retirement plan. Currently in the design phase, the program includes a
number of important features that could expand opportunities to save for
retirement, including automatic enrollment in workplace plans and the
ability to keep an account when changing jobs.
“While there is not one answer to our retirement savings challenges,
Secure Choice could serve as a model for the rest of the nation in how
to expand access and participation in workplace plans,” concluded de la
Vara. “The success of Secure Choice will depend on how successful it is
in converting Latino workers into savers.”
In addition to examining the barriers that prevent Latino workers from
saving, as well evaluating Secure Choice, the report offers additional
recommendations to help Latinos nationwide better prepare for
retirement. These include establishing a state tax credit for low-income
savers, raising the minimum wage to an amount that will keep up with the
rising cost of living, and supporting nonprofit community-based
organizations that provide financial coaching to help underserved
families set goals and build savings and credit.
“Prudential is proud to partner with NCLR on this research and raise
awareness of the retirement readiness crisis among Latinos in California
and beyond,” said Lata Reddy, Vice President of Corporate Social
Responsibility at Prudential Financial and President of The Prudential
Foundation. “We hope this report helps identify the barriers to saving
for retirement faced by the Latino community and other underserved
communities.”
NCLR—the largest national Hispanic civil rights and advocacy
organization in the United States—works to improve opportunities for
Hispanic Americans. For more information on NCLR, please visit www.nclr.org
or follow along on Facebook
and Twitter.
The Prudential Foundation is a nonprofit corporation supported by The
Prudential Insurance Company of America, an insurance subsidiary of
Prudential Financial Inc. of the U.S. The Prudential Foundation
advocates for systemic change focused on eliminating barriers to
financial and social mobility in the areas of meeting basic needs,
connecting people to quality jobs, building personal assets and
transforming communities. As a strategic investor, the Foundation makes
long-term commitments that yield tangible results through both grants
and program related investments.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with
more than $1 trillion of assets under management as of December 31,
2014, has operations in the United States, Asia, Europe, and Latin
America. Prudential’s diverse and talented employees are committed to
helping individual and institutional customers grow and protect their
wealth through a variety of products and services, including life
insurance, annuities, retirement-related services, mutual funds and
investment management. In the U.S., Prudential’s iconic Rock symbol has
stood for strength, stability, expertise and innovation for more than a
century. For more information, please visit www.news.prudential.com.
Copyright Business Wire 2015