Aegon's annual survey highlights ways employers can promote retirement security
LONDON, June 25, 2020 /PRNewswire/ -- Workers globally, including in the UK, expect they will need on average 67 percent of their current income in retirement, but relatively few believe they are on course to meet these needs (25 percent globally, 24 percent UK), according to research released today by the Aegon Center for Longevity and Retirement (ACLR) in collaboration with nonprofits Transamerica Center for Retirement Studies (TCRS) and Instituto de Longevidade Mongeral Aegon.
The report, The New Social Contract: Age-Friendly Employers, explores the vital role of employers in helping workers financially prepare for retirement, a role that has become even more crucial albeit precarious amid the coronavirus pandemic. The New Social Contract: Age-Friendly Employers is based on findings from Aegon's 9th annual global survey of 15 countries spanning the UK, Europe, the Americas, Asia, and Australia that was conducted in 2020.
"Faced with the impact of the COVID-19 pandemic and a stalling of retirement readiness globally, the need for a new social contract across governments, employers and individuals is now more apparent than ever," said Steven Cameron, Pensions Director at Aegon. "As the employer-employee relationship evolves, the role of employers in helping workers prepare for retirement extends beyond offering retirement plans and financial benefits – employers also influence workers' skills development, education and overall well-being."
"Today, individuals are expected to save and invest for an increasing proportion of their retirement income. However, many people find themselves ill-equipped to do so and will likely face further financial pressures in the wake of COVID-19," said Mike Mansfield, Program Director for ACLR. "Findings from Aegon's 9th Annual Retirement Readiness Survey confirm that individuals need more support to harness their true savings potential to adequately prepare for their financial future."
Age-Friendly Employers and How They Can Influence Retirement Security
Age-friendly employers embody an inclusive, diverse and multigenerational workforce, and foster an environment in which workers of all ages have the ability to succeed. The survey findings identify ways in which employers can support their employees to extend their working lives and financially prepare for retirement. The following are options to consider now and in the future, as the broader economic picture improves:
- Cultivate an age-friendly workplace that recognizes the value and contributions of workers of all ages. When asked about initiatives their employers have in place to encourage a multigenerational workplace: 33 percent of workers globally (34 percent UK) indicate their employer is doing nothing to facilitate a multi-generational workplace.
- Provide retirement, health and welfare benefits — and design them with portability in mind so that workers can maintain them as their employment situation changes. Just over half of workers globally (52 percent) are offered a retirement plan by their employer (73 percent UK). The UK's figure is the highest in Europe and second only to India globally, demonstrating the success of Auto Enrolment. Fifty-eight percent of workers globally agree with the idea that a "job for life" is a thing of the past (66 percent UK).
- Offer retirement planning services and financial advice. Only 17 percent of workers globally have a written retirement strategy (13 percent UK) — and 35 percent have a backup plan in the event they are unable to continue working before they reach their planned retirement age (30 percent UK).
- Promote financial literacy through training, education, or financial wellness programs. Only 28 percent of workers globally could answer all the "Big Three" financial literacy questions developed by leading academic experts Drs. Annamaria Lusardi and Olivia Mitchell that test knowledge of compounding interest, inflation, and risk diversification (24 percent UK).
- Encourage health and well-being by offering a workplace wellness program. When asked what health-related attitudes and behaviors apply to them, 59 percent of people globally indicate they eat healthily (64 percent UK), 58 percent avoid harmful behaviors (59 percent UK), and 52 percent exercise regularly (53 percent UK). More than eight in 10 workers are interested in one or more types of workplace wellness programs (86 percent global, 78 percent UK).
- Offer flexible work arrangements to help workers more easily balance their jobs and their personal lives. Globally, 50 percent of workers report having flexible working hours (54 percent UK). Only 28 percent of workers indicate their employers offer pre-retirees the option to move from full-time to part-time work while phasing into retirement (31 percent UK).
- Facilitate lifelong learning to help workers keep their job skills up to date and relevant. Almost three in four workers globally (74 percent, 75 percent UK) are offered one or more types of training to help them keep their skills current and to remain employable in the future. Twenty-four percent are reimbursed for continuing education (15 percent UK).
The New Social Contract: Age-Friendly Employers contains in-depth analysis, country comparisons, case studies, and detailed recommendations. It is based on findings from the 9th Annual Aegon Retirement Readiness survey of 14,400 workers and 1,600 retired people across 15 countries: Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Turkey, the United Kingdom, and the United States. The survey was conducted online between January 28 and February 24, 2020. This is the fourth report in a series calling for the need of a new social contract and it builds on The New Social Contract: Achieving retirement equality for women (2020), The New Social Contract: Empowering individuals in a transitioning world (2019), and The New Social Contract: A blueprint for retirement in the 21st century (2018).
Aegon Center for Longevity and Retirement
Aegon Center for Longevity and Retirement (ACLR) is a collaboration of experts assembled by Aegon with representation from Europe, the Americas, and Asia. ACLR's mission is to conduct research, educate the public, and inform a global dialogue on trends, issues, and opportunities surrounding longevity, population aging, and retirement security. www.aegon.com/thecenter
Transamerica Center for Retirement Studies®
Transamerica Center for Retirement Studies® (TCRS) is a division of Transamerica Institute®, a nonprofit, private foundation. TCRS is dedicated to conducting research and educating the American public on trends, issues, and opportunities related to saving, planning for, and achieving financial security in retirement. Transamerica Institute is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. TCRS and its representatives cannot give ERISA, tax, investment or legal advice. www.transamericacenter.org
Instituto de Longevidade Mongeral Aegon
A champion in the theme of longevity and its social economic impacts in Brazil. With its initiatives, the non-profit organization tackles the challenges of living longer by integrating governments, companies, schools and people through activities towards income, work, health, and behavior. The Instituto is part of the Mongeral Aegon Group and provides complimentary services to create opportunities for individuals of all ages. www.institutomongeralaegon.org