Among C-suite and financial executives at both for-profit and nonprofit organizations, 99% are committed to helping employees save for retirement and 84% believe they have made significant progress toward achieving their organization’s diversity, equity, and inclusion (DEI) goals. That’s according to a December 2021 PNC Survey on institutional social responsibility.

Despite these commitments, many employees remain underprepared for retirement. Specifically, low-income workers, women, and people of color tend to have significantly less access to retirement plans, and when these groups do have access, they accumulate fewer retirement plan assets relative to other demographics. Thus, building a more equitable retirement program is essential to creating better retirement outcomes for employees and helping organizations achieve DEI-related goals.

So, what does the current retirement landscape look like and how can we address these disparities? We propose three primary methods: automatic plan design features, creative matching contribution formulas, and innovative education strategies.

The Current Retirement Landscape

Workplace retirement savings vehicles, such as defined contribution (DC) plans, are one of the most common ways that US workers save for retirement. DC plan programs in the United States totaled $11 trillion in assets as of Q4 2021 and provide over 80 million participants with tax-deferred retirement accounts. As defined benefit plans — pensions — continue to decrease in number and with Social Security facing numerous funding-related headwinds, we believe DC plans will grow ever more critical to retirement outcomes.

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