Pensions For The Next Generation- Insights from Idan Shlesinger's Keynote at the 12th International Pensions Forum

The retirement landscape is changing quickly. In a recent poll, 57% of working Americans said they don't expect to have enough money to retire. Financial stress is the number one driver of mental health issues across the board.

The desire for better pensions is a central theme in recent labor unrest, ranging from car manufacturers to healthcare companies. Yet employers are spending a lot of money on retirement and feel like they're getting nothing in return. Across the media, we see headlines about workers' struggles to prepare for retirement and employers' struggles to compete for talent. We even see stories of professionals in their 70s or 80s who are at the top of their profession, who've done everything just right to enrich themselves to prepare themselves but still don't retire.

Something is wrong with the defined benefit (DB) and defined contribution (DC) programs dominating the current retirement system, and it must be fixed for future generations. In traditional DB plans, there is too much risk for the employer to make it financially viable; in traditional DC plans, there is too much investment risk for the employee.

There is a massive opportunity here to shape new solutions, to learn from the past and apply them to make for a better future. We can use DB and DC plans to create a hybrid solution that blends the collective (DB) and individual (DC) to shape a better future for younger generations.

At October Three, we launched a hybrid retirement concept called PRIME. It allows employees to accumulate money in an account that looks like a typical 401(k) plan but with better returns, guarantees and security. Upon retirement, they can convert a portion of the assets to guaranteed lifetime income and keep the rest as flexible spending.

It's the "best of both" worlds model, blending individualism with collectivism where it makes sense and where employers and employees reap the benefits. For it to be a success, employees must understand and appreciate it fully. Employers must also prepare to cover the risks involved and realize that there are rewards (i.e., improved workforce management, better recruitment outcomes, etc.) for taking on new risks. They also must recognize employees need security and flexibility, and no plan is one-size-fits-all. Employers must help employees create a customized solution that fits their unique needs.

This path is a win-win model for employees and employers. It moves us away from the past's limitations and ensures that the next generations will see retirement in an exciting and positive light.

Revamp your approach and provide your workforce with a cutting-edge DB plan design. With increasing competition to attract top talent in today's job market, proactively stay ahead and reach out to us for insights into our innovative retirement programs. Our expert professionals will guide you through the intricacies and tailor a plan to suit your organization's unique needs.