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WHEREAS, data issued by the Center for Retirement Research at Boston College calculate that 50 percent of all U.S. households were at risk of falling short in retirement with Black Americans demonstrating the greater risk of 54 percent; 61 percent of Latinos, and 48 percent of whites; and
WHEREAS, the racial wealth gap has increased with workers of color significantly less likely than white workers to be covered by an employer-sponsored retirement plan — whether a 401(k) or defined benefit pension, and a large majority of Black working-age households — 62 percent — do not own assets in a retirement account, compared with 37 percent of white households according to "Race and Retirement Insecurity in the United States"; and
WHEREAS, according to The Department of Labor, Black 401(k) plan participants are 60 percent more likely to cash out their retirement savings in comparison to their white peers especially during times of financial stress and job transition; and as a result, incur financial penalties, fees and impacts that limit generating sustainable wealth; and
WHEREAS, an inclusive economy is one where everyone can contribute and earn with fair access to resources and opportunities, while also building generational wealth; and
WHEREAS, auto-portability is the routine, standardized and automated movement of an inactive participant's retirement account from a former employer's retirement plan to an active account in a new employer's plan. In 2018, the U.S. Department of Labor defined a need for auto-portability to consolidate small retirement savings accounts and eliminate duplicative fees for small retirement savings accounts to reduce leakage of retirement savings from tax-deferred retirement savings. The Retirement Clearinghouse has calculated that Black 401(k) plan participants are 60 percent more likely to cash out their retirement savings in comparison to their white peers especially during times of financial stress and job transition; and as a result, incur financial penalties, fees and impacts that limit generating sustainable wealth.
WHEREAS, auto-portability of retirement savings plans is part of the solution to the cash-out problem by enhancing long-term savings for retirement.
THEREFORE, BE IT RESOLVED that the NAACP supports legislation advancing Auto-Portability as an essential tool to address racialized economic inequities in retirement security.