automatic enrollment in retirement accounts and help with emergency savings efforts are among the moves that would help close the gap on retirement savings among black and latino employees a new study found during the covid19 pandemic black and latino workers in particular experienced greater pay cuts and job loss leaving little room to consider retirement savings as a priority us census data from 2020 showed that black americans were twice as likely as white americans to be living in poverty with a median black household earning just 61 of the median white household “over the last several years employers have increased their focus on driving greater inclusivity which has led to positive outcomes in the recruitment and retention of a more diverse workforce” said rob grubka chief executive of workplace solutions at voya financial inc voya  “however despite the efforts … the dimensions of a strong retirement plan such as participation and savings rates that can drive these outcomes still remain a challenge for many individuals today particularly among certain employee communities” grubka said voya’s research found differences in overall workplace retirement plan participation savings rates for retirement and average retirement account balances among different employee communities voya’s research found employee participation rates of 53 black employees and 45 latino employees compared to higher averages of 66 white employees and 62 asian employees while overall a savings rate of 8 existed across all employees voya’s research revealed savings rates among black 71 and latino 69 employees are still less than that of asian 95 and white 84 employee populations voya’s research also found disparities in average retirement account balances with white and asian employee populations showing an average balance of 99000 and 86000 respectively and 45000 and 43000 for black and latino employees respectively even small gaps in retirement savings today will expand over a person’s working years and negatively impact their ability to build sufficient income for retirement voya said to understand how these gaps may affect retirement outcomes voya analyzed the average balance average savings rate average age and average salary of black and latino participants voya calculated an expected overall average monthly retirement income shortfall of 432 or nearly 5880 a year for black participants and a shortfall of 460 or nearly 4812 a year for latino participants this gap may require black and latino employees to either delay retirement or cut back on their retirement lifestyle expectations voya said black and latino employees with access to an auto enrollment retirement plan have a participation rate twotothree times higher than peers at employers who don’t have auto enrollment voya found “auto enrollment features are super powerful in increasing savings rates” tom armstrong voya’s vice president customer analytics and insight head of the behavioral finance institute for innovation specifically employer plans that lack automatic enrollment had active participation rates of 49 white employees 46 asian employees 34 latino employees and 31 black employees in comparison those plans that did automatically enroll employees showed far greater active participation rates of 92 asian employees 90 white employees 88 latino employees and 87 black employees under secure 20 a batch of new us retirement rules signed into law late last year employers who set up new plans will soon have to add autoenrollment features but those with existing plans won’t in addition to autoenrollment companies need to work on reenrolling employees who stopped saving by finding out why and seeing how you can help them to save for retirement again armstrong said emergency savings is another area where companies can help their employees the lack of such funds can have a snowball effect on savings insufficient emergency funds make it more likely that employees will take hardship withdrawals or loans from their retirement plan voya found that two in 10 individuals have less than three months of emergency savings and three in 10 have no emergency savings at all only 28 of individuals have six or more months of emergency savings voya data also shows that participants with inadequate emergency savings were 30 more likely to decrease retirement plan contribution rates black employees were more than twice as likely and latino employees were almost oneandahalftimes more likely to take a loan or hardship withdrawal than white employees voya found employers can help their employees by educating them on the importance of emergency savings and providing planning tools to help with household budgeting and spending strategies voya said in fact 80 of black and latino participants were interested in a workplace emergency savings plan versus 60 of white participants a 2022 ebri workplace wellness survey found that 8 in 10 employees described debt as a problem with student loan debt the second largest debt category trailing only home mortgages voya research showed that 63 of black individuals and 56 of latino individuals are interested in workplace student loan debt management programs versus 31 of white individuals employers need with work with their black and latino employee resource groups to find better ways to communicate help and problem solve armstrong said “talk about what are some things getting in the way have deep and meaningful discussions to help close the gaps” armstrong said “this is complex it’s not one level it’s a multifaceted problem”