Published: June 16, 2004 in Knowledge@Wharton The demographics of today’s workforce, employee expectations about retirement and the types of retirement options offered are all in a state of flux, making retirement policy a moving target for those charged with researching and administering pension plans. That was the message at a recent Wharton conference titled “Reinventing the Retirement Paradigm,” hosted by Olivia Mitchell, executive director of The Pension Research Council at Wharton, and Robert L. Clark, professor of business management and economics at North  Carolina State University.

 

This article is the second of two; the first article, published in our last issue, covered retirement policy issues ranging from pension fund management to accounting reform to transparency. This article focuses on pension planning as it relates to employment trends among both younger and older workers.

 

One Option: “Phased Retirement”

According to Patrick Purcell, an economist with the Congressional Research Service of the Library of Congress, 27% of the population will be over 65 by 2035 compared to 17% now. Growth in the population aged 20-54 will accelerate briefly, then fall sharply, which will have implications for employers trying to fill jobs. Among men, 90% between the ages of  20 to 54 are employed but it drops to 68% for men aged 55 to 64. For women aged 20 to 54, 75% are working, but after age 55 employment drops to 55%.

 

Overall, pension coverage has remained at 50% for more than 40 years, but there has been a substantial shift from defined benefit plans, which provide guaranteed lifetime benefits to employees, to defined contribution plans such as 401ks, which provide savings incentives but leave their management up to employees.
[continue]

Page 1 of 9 > >>