On May 16th, Robert L. (Bob) Johnson, Chairman of The RLJ Companies, Retirement Clearinghouse (RCH) and the Portability Services Network (PSN), delivered the keynote address to the 2024 EBRI Spring Policy Forum, co-hosted by the American Benefits Council.
In Johnson’s address, entitled “Helping to narrow the nation’s lingering racial wealth gap” – the legendary Black American entrepreneur gave Forum attendees insight into the businessman’s long, purpose-driven journey to create entrepreneurial solutions to social problems. Johnson’s achievements began taking shape in the early 1980’s with his creation of Black Entertainment Television (BET) and have culminated in his current efforts in the retirement sector, where he’s become laser-focused on leveraging public/private sector solutions that narrow the wealth gap for minorities and women.
Important Influencers
Recounting his journey, Johnson was quick to give credit to influential people who’ve contributed to his success at opportune moments, providing him with capital, advice, or innovative ideas.
The first such figure described by Johnson was his long-time mentor and friend John Malone, himself a serial entrepreneur who provided Johnson with seed capital for BET, a network for Black Americans that focused exclusively on the Black experience, a need that was unmet until BET arrived on the scene.
Johnson eventually segued to RCH, a company where he’s been the majority owner and Chairman since the early 2000’s. Johnson described his fortuitous hire of Spencer Williams as the company’s President & CEO and as the catalyst for Johnson’s ongoing efforts to narrow the racial wealth gap, where the average White household holds 10 times the wealth of the average Black household.
Williams, Johnson recalled, had an innovative idea – auto portability – that would help low-income and Black Americans preserve their retirement savings as they moved from job to job. It would take time, Williams advised Johnson, as the “retirement industry moves as slow as ever.” Auto portability would also require persistent efforts with regulators and legislators that would ultimately unfold over the course of a decade and through three Presidential administrations.
Persistence (and Passion) Pays Off
As Johnson related to his audience, his persistence has paid off in recent years.
Determined to bring auto portability to market, Johnson’s efforts begin to bear fruit in 2022, with the creation of the first retirement industry-led consortium dedicated to auto portability’s adoption. The competitors who form the nucleus of PSN have joined forces to preserve small balance retirement savings, and in so doing, are actively working to dramatically reduce the wealth gap.
Johnson closed his address to enthusiastic applause from the audience and proceeded to field questions.
Validating The Power of Purpose-Driven Entrepreneurship
As if to underscore the real-world relevance of Johnson’s ongoing efforts, two hours following his address, Craig Copeland, EBRI’s Director of Wealth Benefits Research, provided attendees with a snapshot of key EBRI research projects evaluating the impact on retirement security of auto features in defined contribution plans. In his presentation, Copeland identified auto portability as contributing to an 11.4% reduction in the Retirement Savings Shortfall (RSS) for participants between ages 35-39, accounting for almost 30% of the overall benefits across all auto features for this age cohort.
While Johnson’s legacy in reducing the wealth gap is still a work in progress, it seemed fitting on this day that his efforts received such validation.