“Employers that make a long-term commitment to accommodate their older workers – not just through the physical environment or flexible work schedules, but by providing access to critical employee benefits that can protect an individual throughout their lifetime – will reap the benefits. At a time when Baby Boomers are nearing retirement – and increased longevity is enabling many of them to work productively well into their 70s and 80s – older workers may prove to be the solution to the impending talent shortage. It’s crucial for companies to identify a strategy for retaining trained, experienced workers and keeping them satisfied and engaged,” notes Maria Morris, executive vice president of Institutional Business, in a press release on the study.
Companies grapple with a host of benefits-related issues specific to aging employees – in particular, “health-care costs” was ranked by senior management (81%) as their top benefits-related concern. Employers with 25,000 or more workers cited “long-term care issues” (35%) and “benefits for retired employees” (44%) as a key concerns in 2006, compared with only 14% and 18%, respectively, of companies with fewer than 50 employees.
One-third (33%) of Baby Boomers (age 41-60) have not yet determined when they plan to retire from work, according to the release. Fifty-eight percent of young Baby Boomers (age 41-50) are worried that they will have to work either full or part time to live comfortably during retirement and 61% say that “outliving retirement money” is their number one retirement-related fear. Fueling these concerns is the fact that 27% of these Boomers admit to being “significantly behind” in their savings, and one in ten hasn’t even started saving.
Currently over half (56%) of pre-retirees are interested in having access to financial planners through the workplace to help them make decisions about 401(k) money. In order to help employees address the needs of guaranteed income in retirement, nearly half (46%) of the largest companies – and 31% of companies with 500 or more employees – currently offer annuities through the workplace as an employee benefit. Among all employers, 19% currently offer annuities, compared to 16% of respondents in last year’s study.
The MetLife study found that older workers are generally more satisfied with their jobs and more loyal to employers than their counterparts; 67% of pre-retirees (age 61-69) reported high levels of job satisfaction and 75% indicated that they were very loyal to their employers, compared to 44% and 46%, respectively, of all employees. They are also more likely than their colleagues to report that benefits are an important reason they remain with their employer.
Other key findings of the study included:
- While most (72%) pre-retirees have tried to calculate how long their nest egg will need to last, only 50% of Baby Boomers have taken steps to factor longevity into their retirement plans.
- 26% of all Baby Boomers do not allocate any of their monthly household income to retirement savings vehicles such as 401(k)s, IRAs or annuities. As a result, 38% expect to remain behind in their retirement savings five years from now. Employees age 51-60, who only have a few years left to accumulate a nest egg, are allocating, on average, only 10% of their monthly household income to retirement savings products.
- With nearly half of all employees worried about providing for their own (47%) and their spouses’ (49%) long-term care needs, 16% of employees ranked long-term care insurance as their most valued employee benefit, doubling from 8% in 2004. Employers are heeding this call, with nearly half (46%) of all companies – and 81% of companies with 25,000 or more employees – offering long-term care insurance as part of their company’s benefits offerings.
The study was conducted during late 2005 and consists of two surveys, one which polls employees and one which polls employers. The employee survey, fielded by NOP World in September, polled 885 full-time employees (age 21 and older) at companies with at least two employees, and an additional 328 employees who work part-time and/or are currently on maternity leave. The employer survey polled a total of 1,514 HR/Benefits executives from companies with at least two employees, and was fielded in September by GfK NOP.
A copy of the study can be obtained atwww.whymetlife.com/trends1.