NCLR Report Finds Latinos in California Least Likely to Have a Workplace Retirement Plan

California state policy solution could increase Latinos’ retirement savings and serve as model for other states

LOS ANGELES--()--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.

Contacts

NCLR
Joseph Rendeiro, (202) 776-1566
jrendeiro@nclr.org
or
Prudential
Lisa Villareal, (973) 367-2503
lisa.villareal@prudential.com

Contacts

NCLR
Joseph Rendeiro, (202) 776-1566
jrendeiro@nclr.org
or
Prudential
Lisa Villareal, (973) 367-2503
lisa.villareal@prudential.com