Washington, DC – The National Council of La Raza (NCLR), the largest national Hispanic civil rights organization, today released a policy issue brief entitled, Pension Coverage: A Missing Step in the Wealth-Building Ladder for Latinos, the third in a series of policy papers focused on financial security, asset-building, and wealth levels for Hispanic Americans.

To date, Hispanic workers are the least likely of all Americans to have access to - or participate in - employer-provided pension plans: 26.3% of Hispanic workers in 2001 participated in an employer-provided pension plan, compared to 43.2% of all U.S. workers. At the same time, the total number of participants in private-sector, tax-qualified retirement plans has doubled over the last two decades, and pension plan assets make up a substantial share of the wealth of the typical American household.

“These issues are often overlooked by policy-makers and not recognized as Latino issues. But Hispanics work hard and care deeply about strengthening their families financially and building a better and more prosperous future for their children. The desire for an opportunity to gain greater prosperity is shared among all American families. There is an enormous amount of wealth - building that now takes place through pension plan savings, which Hispanic workers have yet to tap into for a variety of reasons. Policy - makers can help create more doorways to prosperity for Latinos, and enhanced pension coverage is one critical gateway,” stated NCLR President Raul Yzaguirre.

The overall wealth gap between Hispanic and White households stood at 8 to 1 ($9,750 vs. $79,400) in 2000, and 12 to 1 if home equity is excluded as Latino household net worth plummets to $1,850 compared to $22,566 for comparable White households. Lower levels of pension coverage and pension plan participation are key factors in explaining these gaps. The wealth gap not only has implications for Latino workers themselves in terms of less economic opportunity and financial security, but it also has far - reaching implications for a nation which is arguably becoming more polarized economically and socially as it undergoes major demographic change.

Earlier this year the Bush Administration elevated retirement savings as a cornerstone policy issue. Lawmakers on Capitol Hill also continue to work on pension legislation that focuses on coverage and participation levels specifically. But legislation President Bush signed on April 8 does not include major provisions directly aimed at expanding pension coverage, shutting many Hispanic Americans out of the opportunity to use pension benefits to build wealth and gain financial security for their retirement years. Moreover, Hispanics have been on the sidelines of the pension coverage policy debate despite how critically important an issue it is.

The bridge to greater financial opportunity, security, and wealth for Latino workers is built, at least in part, on the ability of more workers to access and participate fully in employer-provided pensions. Though some policy experts might argue this, the road to economic prosperity and greater retirement security for Latinos is not inexorably linked to major restructuring of the Social Security program, an approach that may only exacerbate the wealth gap.

Policy-makers who purport to have an interest in affording more economic opportunity for Latinos should ensure that the U.S. pension system works for all American workers and take steps to create more avenues for Hispanic workers to participate. The issue brief outlines important areas for Latinos, which policy makers should focus some attention, including targeted refundable tax credits and innovative or specialized retirement savings products and employer pension plans. Targeted policy intervention is the only means of closing the gap in wealth between Latino and other American families.

Given that pension coverage is a critical means of establishing a healthy financial position over time, expanding coverage and participation levels could help boost a greater number of Hispanic families into the middle class. Furthermore, given the changing dynamics of the workforce, without ensuring that more Latino workers are actual stakeholders in the pension security policy debate, efforts to gain universal coverage or measurably improve retirement security for American workers may flounder.

Copies of Pension Coverage: A Missing Step in the Wealth-Building Ladder for Latinos is available via PDF file at the NCLR website at www.nclr.org.

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