Retirement preparation: should you be doing more for employees?

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Research has shown that for many retiring baby boomers, a comfortable retirement is not a reality – should employers be doing more to prepare their workforce for retirement?

Market researchers Colmar Brunton found that over 40% of 50 to 70 year old New Zealanders had little or no retirement savings.

“We often think of baby boomers as all being relatively well off and cruising towards early retirement but that's not the case for many,” said Colmar Brunton’s executive director Chris Vaughan.

Less than half (46%) of those surveyed said they were well set up for retirement.

Respondents aged 65 to 69 were the most prepared, with 70% feeling ‘confident’.

While the majority felt confident about dealing with money and financial matters, just 44% had calculated how much money they would need for retirement.

Just over 40% said they had little or no savings and would rely on New Zealand Superannuation to get by.

Sixty per cent of the study’s participants said they would keep working past 65 years of age, and half aged 65 to 69 were still working.

What can employers do?

While the research suggests that the outlook for retirees is not particularly bright, there are ways in which companies can better support their older workers as they transition into retirement.

Youi Insurance

Ivan Pierce, head of human capital at Youi, told HRM that the company invites employees to attend talks to help them plan for retirement and understand their superannuation.

This is an aspect of the company’s ‘YourLife’ program, which is dedicated to staff members’ health and wellbeing.

“There’s something in there for every employee regardless of fitness level, age or gender,” Pierce said.

Teachers Mutual Bank

Teachers Mutual Bank (TMB) is one of the top five largest mutual financial institutions in Australia, and a large proportion of its workforce is aged over 50.

TMB’s partnership with SageCo has resulted in the implementation of the company’s Envisage program.

“Instead of just talking about retirement from a financial angle, it looks at the six different areas: money, identity, health, career, relationships, and the future,” CHRO Helen O’Reilly explained.

“We complemented that program by offering nutrition seminars called Keeping Nifty Over 50.

“We also partnered with one of the super funds and they ran wealth creation workshops.”

Envisage also made older employees feel comfortable to discuss what their career and transition to retirement needs were with managers.

Changes in retirement trends

New Zealand a leading aged worker employer

Earlier this year, PwC launched the results of its Golden Age Index, an OECD ranking of nations by their employment of mature age workers.

New Zealand came in at second place, a position it has maintained since 2007.

“Businesses who make better use of the skills and experience of older workers gain a real competitive advantage at a time when their customer bases are also ageing,” PwC global people business leader Jon Williams said.

The report suggested that businesses could gain from job redesign and role shifts to enable longer careers and manage the health issues facing older workers.

“Training and development should not stop at 50,” the report stated. “Family crisis leave, career breaks and alumni programmes could all help to utilise the skills of older workers at a time when customer bases are also ageing. Age should be included in diversity audits for companies.”

It was also suggested that companies should strive to “move away from linear seniority-based career paths”.

“This would allow older workers, where appropriate later in their careers, to shift down into part-time or advisory roles, avoiding any possible blockage to the career progression of younger workers,” the report read.

From retirement to ‘returnment’

In a report released earlier this year, Adecco flagged up that a key retirement trend they expected to see more of was ‘returnment’, a phrase coined to describe the future of superannuation.

According to the report’s authors, retirement will have practically disappeared by 2030, being placed with the concept of ‘returnment’ which will enable people “to work forever”.

“The trend stems from working until a later age because people want to, rather than have to,” the report said.
 

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