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I’m one of the very few geeks who gets excited about retirement accounts. In fact, I avidly follow the retirement trends of automatic enrollment options and target-date funds the way some folks track the Boston Red Sox. But today I heard about something truly visionary at the first-ever Ariel-Schwab Black Investor Summit in New York City: McDonald’s is taking some dramatic steps to beef up participation among black employees in its retirement plan. (Pun intended.)

Until now, I’ve never seen a company slice and dice participation in its retirement plan by race. After reviewing 401(k) enrollment rates among employees, McDonald’s found that black employees, many of whom are flipping burgers as well as managing stores, were significantly underparticipating in the company’s 401(k). To get them motivated, McDonald’s has upped the ante, offering a 3% company match if an employee makes a 1% contribution to their 401(k). The company match can be as high as 7%, depending on how much employees put into their retirement account. (Some employees also got a 1% raise, so the actual out-of-pocket cost to them was neutral.) Obviously, these incentives are available to everyone at the company, not just to African-American employees.

But it’s not enough to simply add a match, according to Richard Floersch, McDonald’s executive vice president and chief human resources officer. The company is holding educational summits for employees and working with Ameriprise so that workers can get financial advice. The whole initiative even has a cute name: Addin’ it Up. (I’ll have to double-check that spelling.)

So far it seems to be working. During the past three years, retirement plan participation among black store managers jumped by 45% to 95% and their balances are up by nearly 42%. That’s something employees can really sink their teeth into. (End of puns.)

Underparticipation of blacks in the retirement savings game, of course, is not unique to McDonald’s. This year, Ariel Mutual Funds and Charles Schwab conducted a survey of middle and upper income black and white retirees to assess their investing behavior and how well they prepared for retirement. The survey shows that retired blacks have median savings of just $73,000 compared to $210,000 for whites. To see the rest of the survey results, click here.


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