The Principal has launched a new education effort to reach out to Hispanic participants in retirement plans who are struggling to save. Principal noted that for these workers, language isn’t the only barrier. There are cultural differences that prevent Hispanic workers from contributing to their retirement accounts at the same rate as other workers.
“Our research found that simply translating materials to Spanish without considering overall cultural views falls short in encouraging U.S. Hispanic workers to save for retirement,” Greg Burrows, senior vice president of The Principal, said in a statement. “Retirement plans are not universally appealing to all groups. This new program takes a holistic approach, recognizing that an employer-sponsored plan may be a new concept depending on the level of acculturation of the workforce, and incorporating culturally appropriate retirement education services.”
The Principal pointed to research from the Employee Benefit Research Institute that shows Hispanic workers born outside the United States have the lowest rate of participation in retirement plans across companies of all sizes, regardless of income or age. EBRI found 70% of white workers and 69% of black workers with more than $50,000 in income are participating in their employer-sponsored plan, compared with 58% of Hispanic workers in the same income group.
Although those rates are low, The Principal found that compared to non-Hispanic workers, Hispanic employees were more likely to be saving outside their employer-sponsored plans.
As part of The Principal’s “Hispanic Market Program” initiative, the company released a white paper entitled “U.S. Hispanic Retirement Attitudes: How Cultural Influences Can Impact Retirement Savings.”
The key for advisors serving Hispanic plan participants, the report stated, is to help them become “acculturated.” The report broke the Hispanic market into three segments:
- Unacculturated workers are the 26% of Hispanic workers born outside the U.S. who either use Spanish exclusively while at home, or who use Spanish more than English. They tend to be between 35 and 49 and have been in the United States for an average 14 years.
- Partially acculturated workers represent 63% of Hispanic adults born in the United States or born elsewhere having lived in the U.S. for an average 18 years. About half consider themselves “Spanish-dominant,” while a third say they are bilingual.
- Mostly acculturated workers are primarily born in the United States and represent about 11% of Hispanic adults. Most say they are English-dominant and 22% call themselves bilingual.
The report noted that because Hispanic workers in the United States tend to be younger than retirement age, they are less exposed to retirement savings plans.