New WEF report calls for governments and business leaders to rethink approach to retirement
Life expectancy increased from an average of 46 to 73 years between 1950 and 2019 and the United Nations forecasts further increases, estimating that global average life expectancy will reach about 81 years by 2100. Longer lifespans are causing individuals, governments and business leaders to rethink their approach to work and retirement.
A new World Economic Forum report, Living Longer, Better: Understanding Longevity Literacy, in collaboration with Mercer, a business of Marsh McLennan, explores how lengthening lifespans are reshaping how individuals view their working lives and retirement. The report offers recommendations for government and employers to ensure they are adequately supporting people in multiple stages of work and retirement.
The report highlights purpose and quality of life in addition to financial health and resilience – themes that are traditionally associated with retirement planning. It offers options that individuals can consider to ensure they are approaching work, learning and retirement in ways that best meet their needs.
Increasing longevity globally will require new innovations and solutions to address how people can stay financially resilient in a retirement that may be 20 years longer than their grandparents. With supportive actions from government and employers, individuals will have a chance to try new approaches to longer lives and reassess how they want to study, live, work, save and retire in ways that are different from what has been done in the past century.
As people are living longer lives, business and government need to restructure their approach to later life planning. Failing to adopt a multistakeholder approach towards longevity will inevitably result in a significant portion of people retiring into poverty.
Tarek Salam, Head of MENA Expansion at Deel commented, “With people living longer, it is more important than ever for employers to be committed and proactive in building age-inclusive workforces. Otherwise, they risk missing out on all the advantages a multigenerational workforce has to offer. HR teams need to consider reevaluating policies and making sure that older workers are reflected in their organisation’s recruitment processes and Diversity, Equality and Inclusion (ED&I) policies. Organisations should also consider using more age-inclusive language, introduce or emphasise employer benefits such as pension contributions and flexible working opportunities, and review their interview process to reduce age-related bias and discrimination.”
Aaron Portero, Managing Director of Connect Group, added, “Based on the findings of the World Economic Forum report on longevity literacy, it is evident that HR/Recruitment teams in this region, and worldwide, should give careful consideration to their HR policies. It is crucial not only to factor in reduced working hours but also to provide retirement advice from the early stages of an employee’s contract. Waiting until an employee is close to retirement may limit the opportunities for effective planning. Therefore, I strongly recommend that HR policies, both for new hires and existing employees, include a dedicated section on retirement.”
So what could employers do to help? Recommendations cover three key areas of work and retirement including quality of life, purpose and financial resilience.
Implement programmes offering support such as carers’ leave, information and advice for those who have caregiver responsibilities
Understand what impact the company’s retirement plan design has on the trajectory of retirement-readiness and labour flow – check if people can actually afford to retire
Provide flex-work programmes for caregivers, such as job-shares; allow part-time workers to contribute to defined contribution plans; provide training programmes for workforce re-entry, similar to those for early-career employees
Implement and review financial wellness programmes to cover specific life-stage needs that account for gender, cultural and ethnicity differences; consider personalized models to show the impact of different working arrangements and retirement ages on pay and pension and cater to low-income earners who are likely to need the most support saving and planning for retirement
Portero thinks that providing employees with the necessary knowledge about their retirement options, they can make informed decisions and avoid unexpected surprises. By empowering employees with the knowledge and resources to plan for their retirement throughout their employment tenure, they can adequately prepare to meet their retirement goals and ensure financial security.
