Culturally relevant education at work and online is helping Hispanic employees learn more and save more for retirement, according to new data from Principal Financial Group.
Principal created the Hispanic Market Program to provide specialized retirement education for employers with large Hispanic workforces. Since launching the program in 2013, 401(k) plan participation among Hispanic employees in plans with administrative services by Principal is up to 66% (a 10% increase).
Nearly half (45%) either enrolled in their employer’s retirement plan or increased their deferral on the spot after hearing about its benefits. Those who enrolled did so at an average of 5% of salary, instead of the more typical 3%.
“We’re encouraged by these results and are working hard to expand the program to more plan sponsors,” says Carlos Rojas, director of consumer and cultural engagement at Principal. “According to our data from plans under the program, just slightly more than half of eligible Hispanic participants are enrolled in their workplace retirement plan.”
The program focuses on key elements of engagement that:
- Address cultural influences that may undermine retirement savings, such as sending money home or moving back to the employee’s country of origin;
- Identify, develop and integrate cultural elements to help simplify more complex financial topics; and
- Incorporate levels of culture and language by analyzing the workforce, picking up on what’s culturally unique and making suggestions to plan sponsors so they can customize their plans.
Principal offered a success story of a 401(k) plan sponsor for which 70% of employees are Hispanic. After using the education strategy from Principal, the participation rate of Hispanic employees nearly doubled to 68%. Average deferral rate of Hispanic employees increased roughly one percentage point to 5.42% from 4.5%. More than half (53%) of Hispanic employees now defer enough to receive the full employer match of 5%.
Principal also announced it recently launched https://www.principal.com/es, a culturally relevant Spanish version of pre-login principal.com. It offers many of the same features and educational content as the English site.