Charlie Nelson, CEO of Retirement and Employee Benefits at Voya Financial, spoke with Yahoo Finance Live to discuss how COVID-19 has impacted small businesses and retirement benefits.
ADAM SHAPIRO: It’s time for our retirement segment brought to you by Fidelity Investments. We want to invite Charlie Nelson to the stream. He is the CEO for retirement and employee benefits at Voya Financial.
And Charlie, one of the things Voya does is the Just Right Advantage program. Because there are differences in how people prepare for retirement in a racist and gender-specific manner. Tell us about Just Right Advantage.
CHARLIE NELSON: Well, the Just Right Advantage program is a first of its kind that is really focused on helping employers and organizations – generally with undercapitalized, potentially underserved, and underserved communities.
And it’s really designed to give them a fee credit for setting up or maintaining a retirement plan. In particular, it will improve coverage and savings for minority, women, veteran, disabled, and LGBTQ businesses and the nonprofits that support them.
SEANA SMITH: And Charlie, if you leave it, just talk to us about the importance of it right now. Because we’re talking about what the pandemic has been like – has really exacerbated some of the problems we’ve already had, just in terms of race, in terms of access to care, in terms of access to a bank account, financial equivalent. Why is that so important at this point?
CHARLIE NELSON: Well, thank you for bringing that up because that’s really the gist of it. These communities have seen some of the biggest negative effects of COVID-19. You know, a recent study was done that found that 41% of black-owned businesses and about 32% of Latino-owned businesses across the country closed in February through April.
And that’s really, really alarming because these communities are more affected. And I think there was another study recently that found that over 50% of minority owned companies are extremely or very concerned about the financial viability of their business.
One of the things we can do at Voya is to help these companies create or maintain a retirement plan for these underserved and underserved communities.
ADAM SHAPIRO: You know, Charlie, the data you were talking about is from the Federal Reserve, so it seems pretty accurate. But when you talk about this fee lending program I think many of us who are 401 (k) and are lucky enough to forget that our company still has to pay some sort of administrative fee. Is that what you are talking about to help these minority owned companies get credit on these fees?
CHARLIE NELSON: Exactly Adam. In order to make a plan, or even maintain a plan, employers have fixed fees that they usually have to pay to the retirement provider to manage or record their plan, if you will.
Our Just Right Advantage program provides employers with additional subsidies, if you will, or a credit, fee credit, to help establish or maintain their plan. And in addition, there are some federal programs through different ones – the Secure Act and other types of programs that offer tax breaks to small businesses as well.