astounding. For instance, McDonald’s implemented an automatic enrollment program for restaurant managers and enrolled them at 1% of their pay. What’s more, as an incentive the company gave restaurant managers a one-time 1% raise to offset what was being taken out of their paychecks. Along with other plan changes, McDonald’s produced significant results. In two-and-a-half years the percentage of African American restaurant managers participating in its 401(k) plan surged from 50% to 95%. Additionally, their aggregate account balances increased from $12.6 million to $17.8 million, a jump of almost 42%. Moreover, investing by every demographic increased.
Beyond taking responsibility for our own financial security, each of us can play an important role in promoting financial literacy. If you’re a business owner or leader in your company, I encourage you to ask your chief financial officers and HR departments to examine your retirement programs by race and determine how you can help increase participation. Together, I know we can make a difference.
Mellody Hobson is the president of Ariel Capital Management L.L.C./Ariel Mutual Funds in Chicago. She is also a regular financial contributor to ABC’s Good Morning America.