T. ROWE PRICE: LATEST RESEARCH FINDS PLAN ACCESS AND PLAN DESIGN SIGNIFICANTLY IMPACTS RETIREMENT SAVINGS

Rhea-AI Summary

T. Rowe Price released research showing the significant impact of employer-sponsored retirement plans on employee participation and savings. While only about half of workers participate in retirement plans, participation rises to 88.2% when offered by employers. The analysis highlights disparities in participation rates among racial groups, with nearly 60% of white workers participating versus 40% of Black and 30% of Hispanic workers. The firm emphasizes the need for improved access and plan design features like auto-enrollment to enhance participation and financial wellness.

Positive

• Increase in retirement plan participation from 50% to 88.2% when offered by employers.
• Findings highlight the potential for improved financial wellness through better plan access and design.

Negative

• Participation rates remain low at 40% for Black and 30% for Hispanic workers.
• The gap in retirement savings between racial groups suggests systemic issues in financial planning access.

Employers have opportunity to positively impact racial, ethnic, and overall retirement savings gaps through plan access and plan design

BALTIMORE, April 12, 2022 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, today released new research based on its annual Retirement Savings and Spending survey and analysis of the Census Bureau's 2021 Current Population Survey and found that about half of all workers participate in a retirement plan of some kind. However, when a retirement plan is offered by an employer, participation increases significantly to 88.2%.  

"These findings highlight that the first and most important step toward closing the retirement savings gap is to expand access to retirement plans," said Sudipto Banerjee, vice president, Retirement Thought Leadership at T. Rowe Price. "The retirement industry can act now to help close the gap by encouraging employers to not only sponsor plans but to incorporate plan design levers, such as auto-enrollment and auto-escalation, and by offering financial wellness programs."

As previously reported by T. Rowe Price, Black and Hispanic workers significantly lag in participation and savings compared with white workers, furthering the notion that plan access and plan design can help to close this gap and encourage other positive financial behaviors as well. Additional research and analysis from T. Rowe Price's latest white paper finds:

• Nearly 6 in 10 white workers participate in a retirement plan, compared with 4 in 10 Black workers and 3 in 10 Hispanic workers
• The racial and ethnic participation gap narrows significantly when a retirement plan is offered, with over 80% of Black and Hispanic workers participating in a plan
• Black and Hispanic workers are more likely to start saving for retirement later than white workers
• More than 80% of Black and Hispanic participants rely on their workplace for financial advice

About T. Rowe Price
Founded in 1937, T. Rowe Price (NASDAQ-GS: TROW) is an independent global asset management company with $1.55 trillion in assets under management as of March 31, 2022. The firm is focused on delivering investment excellence and retirement services for institutional, intermediary, and individual investors. Our strategic investing approach, driven by independent thinking and guided by rigorous research, helps clients feel confident in pursuing financial goals. For more information, visit troweprice.com, Twitter, YouTube, LinkedIn, Instagram, or Facebook.

View original content:https://www.prnewswire.com/news-releases/t-rowe-price-latest-research-finds-plan-access-and-plan-design-significantly-impacts-retirement-savings-301523900.html

SOURCE T. Rowe Price Group, Inc.

FAQ

What did T. Rowe Price's recent research reveal about retirement plan participation?

T. Rowe Price found that participation in retirement plans is significantly higher when offered by employers, rising to 88.2%.

How do racial disparities affect retirement savings according to T. Rowe Price?

The research indicates that Black and Hispanic workers have lower participation rates in retirement plans compared to white workers.

What strategies does T. Rowe Price suggest to improve retirement savings?

T. Rowe Price recommends expanding plan access and incorporating features like auto-enrollment and financial wellness programs.

What specific statistics did T. Rowe Price report regarding retirement plan participation by race?

Nearly 60% of white workers participate in retirement plans, compared to 40% of Black workers and 30% of Hispanic workers.

How can plan design impact retirement savings gaps?

Effective plan design, including auto-enrollment and financial wellness programs, can significantly increase participation among underrepresented groups.