UK Plan Sponsors Braced For Workplace Demographics Shake Up
14 August 2012 (PLANSPONSOREurope.com) – UK plan sponsors expect significant changes in the demographics of their workplace due to the abolition of the Default Retirement Age (DRA), and the Chancellor’s decision to link the State Pension Age (SPA) with longevity expectations, according to Jelf Employee Benefits.
The research reveals nearly two thirds, 63%, of employers expect the age profile of their workforce to change over time, with just 26% not expecting any direct impact.
Steve Herbert, head of benefits strategy for Jelf Employee Benefits, says: “To avoid workforce stagnation employers may need to take a much more proactive stance in encouraging their employees towards making adequate retirement savings. This will mean much greater levels of guidance, steerage, and promotion of the benefits of pension savings, possibly together with higher levels of employer contributions as well.
“However, employers also need to accept that as the workforce ages, their policies must reflect this, and they will need to keep the older employees engaged with the business as much as the new blood. There is now a lot of anecdotal evidence linking engagement to improved productivity and profit, so it’s clearly in the employer’s interest to do this.
“When the DRA was scrapped, an exemption was made to allow for certain benefits to cease at State Pension Age. Yet it does not necessarily follow that employers should take this option. An older employee, who suddenly finds themselves without the benefits to which they were previously entitled, may very well feel demotivated, and thus disengaged. This could be avoided by extending cover for all benefits to a higher age.”