The New Social Contract: Future-Proofing Retirement
The New Social Contract: Future-Proofing Retirement report explores the impacts of the COVID-19 pandemic and offers detailed recommendations for improving retirement security.
The COVID-19 pandemic has exposed weaknesses in retirement systems, while also revealing opportunities for improving them and intensifying the imperative for change.
The New Social Contract: Future-Proofing Retirement - based on findings from the 10th annual global retirement survey of 15 countries - explores the impacts of the pandemic and offers detailed recommendations for improving retirement security.
The survey findings illustrate workers’ retirement outlook:
- Relatively few workers are financially ready for retirement
- The pandemic disrupted employment for many
- Saving habitually is essential for building long-term retirement savings
- Achieving a secure retirement requires long-term planning
Almost four in 10 people globally are concerned about running out of money in retirement
Long before the appearance of COVID-19, retirement systems around the world have been struggling with long-term sustainability. Social security and other government benefits are facing severe financial strain due to population aging, increasing longevity and declining birth rates, and persistently low interest rates.
Defined benefit pension plans, traditionally offered by employers, are being replaced by defined contribution plans funded by employees, which can have contributions from employers. Individuals are increasingly expected to self-fund a greater portion of their retirement income, yet many are ill-equipped to take on the risks and responsibility.
Now, the pandemic and its extreme disruptions – ranging from the public health crisis to shocks to the global financial markets, communities, and workforces – have exacerbated this already precarious situation.
A call to action: Future-proofing retirement
"Working together – policymakers, industry, employers, and individuals – we can design more inclusive, equitable systems that address the ever-changing retirement landscape, and in a way that provides greater flexibility and security for people to work and retire on their own terms" - Catherine Collinson, CEO and president of Transamerica Institute® and TCRS, and executive director of Aegon Center for Longevity and Retirement.
The report makes details recommendations for government policymakers, as employers and individuals in order to build the New Social Contract to future-proof retirement systems.