The Integral Role of Retirement Benefits in Promoting Diversity, Equity, and Inclusion (DEI)
Nate Moody, CPFA – RETIREMENT ADVISOR, PARTNER
MARCH 2024
As business leaders, understanding the connection between employee benefits and diversity, equity, and inclusion (DEI) can be crucial, especially in the context of retirement benefits. February’s Black History Month and March’s Women’s History Month remind us of the importance of reflecting on diversity and inclusion efforts within our organizations.
Retirement benefits are not just a component of your employee benefits package—they can be a reflection of your organization’s commitment to DEI. A well-structured retirement plan can significantly impact attracting and retaining a diverse workforce. In fact, studies show that retirement plans are highly valued among employees, with diverse groups often seeking employers who offer comprehensive retirement benefits.1
However, the disparity in retirement savings among different demographic groups cannot be ignored. Data from the National Institute on Retirement Security reveals significant gaps in retirement savings across racial and gender lines. This gap underscores the need for retirement plans that are accessible, equitable, and inclusive.
To bridge this gap, the following strategies can be utilized:
1. Personalized Financial Education
Tailor financial education programs to meet the diverse needs of your workforce. By acknowledging and addressing the unique financial challenges faced by different groups, you can enhance financial literacy and retirement readiness.2
2. Inclusive Plan Design
Evaluate your retirement plan’s design for barriers that may disproportionately affect certain groups. For example, consider the impact of automatic enrollment, match rates, and eligibility criteria on diverse employees.3
3. Encourage Engagement
Utilize targeted communication strategies to engage underrepresented groups in your retirement plan. Highlighting the benefits of early and consistent contributions can empower all employees to invest in their future.3
4. Student Loan Debt
Consider a tax-advantaged student loan assistance program. Minorities and women are disproportionally impacted by student loan debt which in turn impacts their ability to save for retirement, especially in younger years.4
5. Review and Adjust
Regularly review your retirement plan’s performance and participation rates among different demographic groups. Use this data to inform adjustments that promote greater equity and inclusion.
In Conclusion
Aligning your retirement benefits with your DEI objectives may not only be good practice—but may also be a necessity in today’s diverse workforce. By taking deliberate steps to ensure your retirement plan is accessible and equitable, you can support the financial well-being of all employees.
As we celebrate Black History Month and Women’s History Month, let’s commit to creating inclusive retirement benefits that recognize and value the diversity of our workforce. Let Lebel & Harriman guide you in enhancing your organization’s retirement plan to better serve your diverse employee base. Contact us today to learn how we can support your DEI goals through comprehensive retirement plan management.
This document is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. The information provided has been derived from sources believed to be reliable, but is not guaranteed as to accuracy, and does not purport to be a complete analysis of the material discussed.
