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STATEMENT OF: 

BRENT A. WILKES 

ON BEHALF OF: 

LEAGUE OF UNITED LATIN AMERICAN CITIZENS, 

AMERICANS FOR SECURE RETIREMENT 

To the: 

U.S. Department of Labor 

U.S. Department of Treasury 

Joint Hearing on Lifetime Income Options for Retirement Plans 

September 14, 2010 

 
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I am Brent Wilkes, National Executive Director for the League of United Latin American 

Citizens (LULAC). We are the largest and oldest Hispanic organization in the United States. 

LULAC’s mission is to advance the economic condition, educational attainment, political 

influence, health and civil rights of Hispanic Americans through community-based programs 

operating at more than 850 LULAC councils nationwide. The organization involves and serves 

all Hispanic nationality groups. 

On behalf of all our members, we appreciate the opportunity to submit testimony for this joint 

hearing on Lifetime Income Options for Retirement Plans. We are pleased that your two 

departments are working steadfastly to promote guaranteed lifetime income for Americans in a 

comprehensive manner. We commend the Obama Administration and the Departments of 

Treasury and Labor (the “Agencies”) for this effort. Given the increasingly difficult retirement 

challenge facing Americans, we strongly support encouraging and providing incentives for 

Americans to secure a steady stream of guaranteed income in retirement. 

Our organization is a member of Americans for Secure Retirement (ASR), a broad-based 

coalition of 70 member and affiliate organizations representing women, farmers, HispanicAmericans and small businesses, among others. For the past few years, LULAC and ASR have 

worked to raise awareness about the difficult challenges Latinos face to enjoy a secure 

retirement. 

The Hispanic community is hit disproportionately hard when it comes to retirement security 

vulnerability. While Hispanics work in all sectors of the economy, they are more heavily 

concentrated in jobs that lack traditional retirement options and typically earn a lower income, 

affecting their ability to save for retirement. Research confirms this growing problem. A recent 

study conducted by The Hispanic Institute and Americans for Secure Retirement found that only 

25.6 percent of Hispanics are covered by pension plans, compared to 42.5 percent of whites and 

40 percent of African-Americans. 

There is overwhelming evidence indicating that Hispanics face additional challenges in 

preparing for retirement, as compared to the greater population. Today, the U.S. Hispanic 

population makes up about 48 million people; by 2050 that number will increase to 132 million, 

accounting for nearly 30 percent of the total U.S. population. Due to the growing Hispanic 

population, an average longer life expectancy, and because only 16 percent of the population is 

in their pre-retirement years, Hispanics will make up a significant number of those entering 

retirement in the future. 

I would like to focus my remarks on several key factors that explain why Latinos are struggling 

with saving for retirement, and provide some solutions for consideration by the Agencies. 

First and of particular importance is the lack of financial education and literacy among the Latino 

community. Indeed, Latinos have not received the same type of financial education as is afforded 

to other segments of the population. Even at the most basic level, Hispanics suffer from an 

absence of information on retirement savings vehicles available, how they work, and why they 

are important. Complicating matters is an often overlooked language barrier. Financial 

education should be available to Hispanics, indeed all Americans, as early as high school. 
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Alongside geometry, biology and literature, students should be taught how to prepare for 

retirement as part of any high school curriculum. 

In addition, there are cultural factors that explain why Latinos need extra assistance in financial 

literacy. In the case of non-U.S. born Hispanics, savings strategies are far different than those 

prevalent in the United States. For instance, the instability of many national banks in Latin 

American countries has produced widespread distrust and concern over the solvency, stability 

and security of banks in general. As a result, many first generation Hispanics choose to keep 

their savings in their homes and out of banks and retirement plans. 

Making matters worse is the high number of Latinos that are small business owners, many of 

whom will rely on the sale of their business to finance their retirement. However, a lack of 

knowledge and a reluctance to invest even a portion of these proceeds into a retirement vehicle 

that provides guaranteed lifetime income means they are likely to fall short in retirement. And 

they, along with their employees, often do not even have access to traditional defined benefit or 

defined contribution plans such as a 401(k). 

Further, Latinos have a long tradition of keeping older, retired relatives such as grandparents in 

the family home. Without question, this reduces costs for these retirees, leading to little planning 

and less concern about their retirement security. Indeed, many Hispanics approaching retirement 

remain reliant on the younger generation to ensure they are adequately provided for during their 

golden years. However, as our world becomes smaller and more modernized, and as Hispanic 

Americans embrace the culture of the United States, the younger generation is reluctant to 

continue this tradition. More and more Latinos are attending college, traveling and moving away 

from home, leaving those anticipating financial assistance from their children or grandchildren 

unprepared and on their own in retirement. This is a growing problem in Hispanic communities 

today, contributing to an overall lack of preparation for retirement – and the housing and health 

care costs associated with it. 

Second, Latino and other minority communities are more likely to be targeted by predatory 

practices which severely impact the ability of this population to save at all, let alone set aside the 

significant amounts of resources needed for retirement. In fact, Latinos are specifically targeted 

and exploited in a number of instances, having negative effects on their ability to plan and save 

for retirement. 

For example, in Hispanic communities, the presence of traditional banking facilities has 

diminished, particularly in inner cities. Payday lenders, check cashing outlets, liquor store 

banking and shops providing immediate, high-interest tax refunds now dominate the landscape 

while traditional banks and other financial institutions are hard to find. 

These predatory establishments are high cost, inefficient and specifically target the Latino 

community – in Spanish. The language barrier specifically insulates these bad actors from 

oversight, leading to a marketplace that is deregulated and overcharging – taking advantage of 

those low-income families who need the money most. 
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These predatory practices are just the tip of the iceberg. Other major industries, such as auto 

dealers, have targeted Hispanics and other minority groups, raising interest rates to 

disproportionately high levels. In fact, studies indicate that Hispanics and African Americans are 

often charged as much as double the interest rate on auto loans as their white counterparts. 

Third, the foreclosure crisis will have an adverse impact on the ability of minorities to save 

adequately for retirement. Multiple studies, including a recent analysis by the Center for 

Responsible Lending indicates that the foreclosure crisis has disproportionately impacted African 

American and Latino homeowners and neighborhoods1

. According to the report, an estimated 

17% of Latino homeowners and 11% of African-American homeowners have already lost their 

home to foreclosure or are now at imminent risk. In fact, a home owned by a Hispanic family is 

71 percent more likely to go through foreclosure than a home owned by a white family. Even 

more concerning is that the study also predicts the foreclosure crisis will destroy a generation of 

personal wealth in minority communities, intensifying an already prominent income and equity 

gap between white and non-white families, through loss of assets and diminished property 

values. Many Hispanics are reliant in the equity in their homes for their retirement. However, in 

light of the aforementioned statistics, new more reliable vehicles must emerge for investment 

that will ensure a secure retirement. 

These are just a handful of the challenges faced by minority communities, but are often 

overlooked by policymakers as they consider options to ensure Latinos are saving more, and 

investing their resources into retirement vehicles that last a lifetime. LULAC encourages these 

factors to remain in the consciousness of your Agencies as you promulgate rules to encourage 

greater participation in retirement plans that encourage lifetime income. In addition, we 

recommend the following be considered as part of any policy changes proposed by the Agencies: 

An increased emphasis on financial literacy through education, which will increase awareness, 

understanding, and participation in retirement savings plans. Current law or regulation does not 

place an emphasis on financial education in the classroom or in the workplace. To give Hispanic 

Americans assurances and build confidence in the effectiveness of savings vehicles to prepare 

for retirement, educational opportunities must be provided, in English and Spanish. For an 

increased effectiveness, these opportunities should acknowledge the cultural differences between 

the United States and Latin America, particularly regarding the banking and financial systems, 

while also explaining the evolving treatment of older Americans. Financial management must 

also be a key element of this education, explaining the particulars of credit cards, interest rates, 

and the long-term damage that can be done by credit debt. 

To remedy the predatory targeting of Latinos in their communities, additional regulation is 

needed. One unfortunate blemish in the banking reform bill recently enacted by Congress is that 

auto dealers were exempted from new federal oversight, shielding a loosely regulated industry 

from accountability. We will continue pressing for increased oversight of this industry and in 

these communities. 

 

1

 Bocian, Li, Et. al. “Foreclosures by Race and Ethnicity: The Demographics of a Crisis” Center for 

Responsible Lending Research Report, June 18, 2010. 
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But in the immediate term, those working to oversee the business community must be educated 

and informed about these practices. More importantly, they must be equipped with bilingual 

employees capable of overseeing the Spanish-language predatory practices that are currently 

overlooked by overseers. 

In addition, policymakers must consider encouraging retirement vehicles that will supplement 

Social Security, bridge the gap in access to employer plans, and replace home equity as a reliable 

source of retirement assets. Considering the problems Hispanics face in saving for retirement, 

increasing access to and knowledge of instruments that provide guaranteed lifetime income are 

important for your Agencies to pursue, not just to help Hispanics but all Americans. Options 

such as annuitization, among others, not only minimize financial risks but provide retirees with 

the means to build retirement savings and secure guaranteed income lasting as long as they live. 

In fact, annuitization of all or a portion of retirement assets is the only method that can provide a 

guaranteed stream of lifetime income through retirement – a “paycheck for life” that cannot be 

outlived. An annuity provides lifetime payment at regular intervals. These lifetime payments 

begin when the retiree determines they are needed and continue for the lifetime of the retiree 

and, if selected, his or her spouse. 

Our organization and its members have taken action to raise awareness of the problem and 

potential policy solutions. This past July, at LULAC’s 81st National Convention, our delegates 

approved a resolution calling for federal retirement policy that helps all Americans better 

manage their savings to provide income that will last a lifetime. 

Specifically, the resolution calls for retirement policy that maximizes retirement security by 

making it easier for Americans to access guaranteed lifetime income sources. In addition, the 

resolution explained that while traditional sources of retirement income will not be sufficient for 

many Americans, the challenges faced by Hispanics in maintaining their standard of living make 

them particularly vulnerable. Through the resolution, LULAC’s delegates resolved to: 

 Acknowledge the need to support retirement policy that makes it easier for Americans to 

have guaranteed lifetime income sources that help them better manage their savings in 

retirement. 

 Acknowledge the need for the U.S. Congress to act now to ensure secure retirement as 

the first of the 77 million baby boomers begin to retire soon. 

 Support passing legislation that will help Americans secure a steady stream of income in 

retirement so their standard of living does not decline. 

Thank you for the opportunity to submit these remarks today. LULAC is grateful for the 

opportunity to raise awareness of the challenges Latinos face in retirement, and looks forward to 

working with your two Agencies in developing or refining proposals that will provide Hispanics 

guaranteed lifetime income in retirement. Thank you.