Demographics Challenge Employment, Retirement Practices: Comptroller General

Walker pointed out that we are in the midst of immense transition, specifically:

• Political transitions –The new administration faces the huge challenges associated with Social Security and Medicare.

• Economic transition — Having moved from an industry-based economy to a knowledge-based age, the competitive advantage is now based on people, process and technology as opposed to labor and machinery.

• Fiscal transition — Government has moved from years of deficits to years of projected surpluses.

Walker noted that in a world where technology continues to evolve, employers and workers face quality of life challenges, increasing healthcare costs and changing demographics. To successfully deal with these challenges we need to focus on results.

He noted that our demographics are changing, “We live longer, but fewer workers are now supporting more retirees. In the future, individuals will be spending more of their years in retirement than as workers.”

Walker highlighted the need for employers to re examine their policies, “in a knowledge-based economy, there is now a need to encourage employees to contribute in the workplace for a longer period of time, perhaps in the form of part time employment. This will require changes in our pension laws.”

Walker also emphasized the challenges faced with rising healthcare costs and the limited resources we have in place to meet these. He stressed that more promises have been made than the government can afford to keep.

He points out that we will be facing a demographic tidal wave as the baby boomers begin to retire, although we do not have a full picture of the challenges we face, we know that we start going into deficits within the next 15 years.

“Social Security can and should be reformed without much difficulty however, Medicare is unsustainable in its current form and will have to be restructured,” he said.

– Camilla Klein                editors@plansponsor.com