Most companies focus primarily on employees’ age and income levels when it comes to promoting enrollment.
But new research suggests two other factors that may be important in predicting enrollment rates: race and ethnicity.
According to a recent study, white and Asian employees are more likely to participate in their company 401(k) plans than African-American and Hispanic employees earning similar salaries.
The study benchmarked the average 401(k) participation rates of employees earning between $30,000 and $59,000 per year. It found:
- 75% of African-American and Hispanic employees participate in the 401(k) plan
- 80% of Caucasian employees do, and
- 84% of Asian employees enroll.
The average employee salary contribution percentage at this salary range was 5.9% for African-Americans and 6.1% Hispanics; compared to 7.1% for whites and 8.4% for Asians.
However, the more 401(k) education employees of all ethnic groups receive, the lower the participation gap.
Click here for a complete study summary.