“Retirement, in particular, is an area where companies must reestablish their traditional leadership role. For much of the 20th Century, it was an element of the social compact in many countries that employers had a responsibility to help workers navigate retirement. In some countries, particularly the United States, the shift to defined contribution plans changed the structure of that responsibility, leaving too many workers unprepared… In response, companies must embrace a greater responsibility to help workers navigate retirement.
-Larry Fink, CEO, BlackRock, Annual Letter to CEOs
Championing “stakeholder capitalism” in 2018, highlighting retirement in 2019
Last year Larry Fink, BlackRock’s CEO—and manager of $6 trillion in investments, caused quite a stir at Davos and in the business press by calling on companies to re-think their obsession with shareholder return as the only goal of today’s corporations. He argued that the economic development and national wealth fostered by this priority had come at a cost to the other critical stakeholders of every company: employees, customers and communities.
This year Fink sharpened his general critique with a focus on the damage done by employers who over the last decade-and-a-half have eliminated defined benefit pension plans. This shift has helped de-stabilize the traditional “three-legged stool” of retirement savings, pensions and Social Security. On our Respectful Exits website, we describe in great detail the damage done by the decision of companies to place the value of their shareholders over the value contributed by decades of hard work from employee stakeholders.
Turning the call for undoing past damage into a plan of action
It is heartening to see a serious man of Wall Street recognize past injustice and its consequences. But encouraging as his words may be, Fink draws the line at telling companies what to do and how to fix this problem going forward. That’s where we step in: our Respectful Exits team and our growing body of supporters are actively pursuing solutions to rectify this dire situation.
We are not naïve enough to think that employers will simply and quickly heed Fink’s call and reinstate the pensions of old. Those days and the employer commitments they reflected are gone. The new longevity and financial peril of the workforce will have to be addressed through broad and persistent innovation and persuasion.
Today’s challenge is represented in one dramatic statistic that captures the gap between what aging workers want and what employers currently offer: 64% of workers age 50-64 hope to work longer and ease into retirement, while only 5% of employers offer such options as formal programs.
Any serious effort to solve the looming challenges facing today and tomorrow’s pre-retirees must involve substantial and sustained change in the way organizations structure careers.'Any serious effort to solve the looming challenges facing today and tomorrow’s pre-retirees must involve substantial and sustained change in the way organizations structure careers.'Click To Tweet
Closing the gap from both sides
The essence of our economic system is the endless quest for balancing supply and demand. We apply this notion to the task of redefining the way aging workers and their employers negotiate the later years of employment.
We seek rapid and robust adoption of our comprehensive Longevity Agenda:
- End the 65 “sell-by” date as a mandatory or informal “retirement age”
- Practice career-long development and training of all staff
- Encourage robust flexible scheduling for employees of all ages
- Provide ongoing, on-demand financial wellness counseling
- Implement and promote phased and flexible retirement options
And we are freely distributing our new universal web-based tool ThePhazer™ for employees to propose a win-win path to flexible and phased retirement.
In sum, to close the gap between the options employees need and the choices employers offer:
We are mobilizing employees by:
- Launching ThePhazer™, a toolkit for individuals to extend work and retire flexibly
- Building its mass distribution to educate employees and maximize ThePhazer use
- Developing Longevity Forums to promote the Longevity Agenda in communities and workplaces
We are engaging employers through:
- Promoting the business case for retaining the service and value of aging workers
- Identifying, supporting, and promoting employer best practices in redesigning work
- Conducting employer-supported national regional conferences to promote the Longevity Agenda
Fink’s call for change should be met by all of us committing to moving the crisis of degraded retirement to the center of our national awareness and collective activity.
We urge employers to change their behavior and employees to use ThePhazer-driven process and their power in numbers to make the Longevity Agenda standard practice.