The Los Angeles office of Lockton Retirement Services today announced the launch of its new Retirement Readiness Practice and proprietary suite of consulting services to help employers mitigate increased costs associated with an aging employee population who are deferring their retirement beyond 65 years of age.
Employers will bear the burden of several layers of increased costs when employees have no financial choice but to continue working beyond a normal retirement age.
“Dealing with an aging, financially unprepared workforce is a reality that should concern employers,” explains Rick Unser, vice president of Lockton Retirement Services. ”Employers face serious financial implications if they do not take steps now to help their older employees leave the workforce and successfully transition to retirement.”
Unser cites a 2011 EBRI Retirement Confidence Survey where 41 percent of workers 55 and older expect to retire beyond age 65, more than double from 2001. An aging employee population which must remain in the active workforce results in higher employer expenditures for health benefits, work related accidents with more severe outcomes, and productivity losses, according to Unser.
Lockton’s client experience has shown that healthcare costs for employees over the age of 65 are more than double that of employees aged 45-55.
In addition, workers’ compensation data has shown that while the statistical rate of work-related accidents does not increase dramatically for employees over age 65, when incidents do occur they are more severe and involve more paid time away from work.
A NCCI study shows the average costs per claim for older workers were more than twice as high on lost-time claims (more than $27,000 vs. slightly more than $12,000 for younger workers).
“It is in the best interests of employers to improve the retirement outcomes for their employees,” adds Unser. “Lockton has dedicated the intellectual capital and resources for employers to develop a culture of retirement readiness, which will help employees enjoy a comfortable retirement while generate short and long term cost savings for their companies.”
Lockton employs a strategic, multidisciplinary approach to address the complete needs of aging employees where retirement readiness is only one successful byproduct of a comprehensive program. The broad set of workforce interventions and risk management strategies include:
– Assessment of current income replacement ratios of employees with ockton’s interactive proprietary “Retirement Readiness Dashboard”
– Optimal plan design to encourage employee retirement readiness and aximize the impact and effectiveness of employer fixed or discretionary ontributions
– Investment consulting services to secure cost efficient and appropriate nvestment choices based on the needs of employee demographics
– Customized targeted education campaigns to modify employee savings bhavior
– Evaluation and engagement of independent service providers to deliverthe desired level of investment advice and one-on-one support