Expanding Equitable Retirement: Get to know this new DCIIA-Aspen-Morningstar Initiative
Retirement savings are the second-largest source of household wealth for Americans, with over $10 trillion in assets across the defined contribution (DC) system. Yet we know that this system has inequities and is not creating security and wealth for everyone. Access to retirement savings is foundational, but more than 45 million workers lack a workplace retirement savings option.
Let’s dive deeper. We see race and gender savings disparities throughout the DC system. Nearly 60% of white households participate in retirement plans, compared to just 45% and 34% of Black and Hispanic families, respectively. (See: 2019 Survey of Consumer Finance). The difference in balances is substantial as well—the typical white household has nearly $50,000 in savings, which is 2.5 times that of Black and Hispanic families.
As an industry that strives to create more equitable and inclusive financial wellness for all, the first step is identifying who is getting left behind.
That is why DCIIA, The Aspen Institute, and Morningstar have partnered to build a platform for action to close gaps within the retirement savings system. This project brings together stakeholders across the industry—advisors, employers, recordkeepers, advocates and experts — to create a platform that will help stakeholders to understand and influence how and why our current system does not work for everyone.
To support both policymakers and financial services providers in their ability to improve retirement savings outcomes for all workers, we need to know a great deal more about workers of all kinds.
The first step is understanding where we are now! To identify gaps and solutions, we need to better understand savings and investing behavior today. To date, this type of exploration by ethnicity has been extremely difficult, as employee demographic information is stored in systems that are separate from the recordkeeping data. Linking that information is critical to better understanding behavior.
So, what’s the ask? We know many companies who currently provide services in the retirement industry and many employers have made substantial commitments to racial equity. There are three distinct ways industry leaders can get involved:
Share your plan’s anonymized data. As an industry leader, adding your data to the universe will provide insight into your workforce and show your organization’s commitment to this important initiative.
Invite your plan sponsors. Your influence and connection with employers can strengthen the overall work of this project and enhance plan sponsor relationships.
Become a leadership partner. Join the efforts as a foundational partner, to help advise, direct and influence this important initiative.
What’s in it for Employers:
Free analysis and insight into your workforce! Better understanding of benefits offerings and employee behavior.
Impact your company’s diversity, equity and inclusion goals in a tangible way.
Showcase your leadership through making a personal commitment to this important issue.
Join us to make retirement saving a more inclusive instrument of wealth creation.
To learn more about this ongoing initiative, click here or contact rrc@dciia.org for more information.
This piece was contributed by DCIIA’s Pam Hess and Simone Lamont, members of the DCIIA Retirement Research Center. Karen Andres and Kara Watkins of the Aspen Financial Security Program, and Aron Szapiro and Jack VanDerhei of Morningstar are also closely connected to this work, among others.
This piece was featured in the December 15, 2022, edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.
