Yesterday I spent three hours with students in their 20s who are thinking about working in the HR and benefit field. It is a surprise to see the generational difference, to understand what their expectations are for their benefit plans and, in particular, for their future and their retirement.
For the generation that I’m part of, –now just turning 50– we expected a retirement similar to that of our parents, with Social Security, a pension and health care upon retirement. Now, most of my generation is facing the future without a defined benefit plan, no pension and no real savings because the value of homes has gone down, pay is going down and opportunities for work have changed.
In contrast to our experience, the generation before us retired with pensions because more than 50% of employers had them. So they have the benefit of having a pension and Social Security and, in many cases, some form of health care.
Today’s economics for the “50 somethings” or late Baby Boomers, looks much more bleak because we prepared thinking we would have the same options as the preceding generation. We’re facing the reality that that’s no longer true.
I can identify with the 99% crowd that is currently walking Wall Street. We went to high school. We went to college. We got our degrees. Now, what do we have to show for it?
In our work serving the membership of unions, we find that union brothers and sisters have value because they have a voice in the workplace that many people in my generation, the 99% crowd in particular, do not have. Without a voice, we must settle for whatever leftovers corporate management is willing to give.
Again, I turn my mind to the students I was teaching last night and their expectations. I couldn’t get past one of the students who said, “Well, I want to retire at age 45. In fact, I’m going to retire at age 45.” By the end of the class when I was comparing the risk in a defined benefit contribution plan to the pension plan of the previous generation, it became evident that this student thought that that may not only never happen, but he was obviously wondering how much he would have to earn to get to a pension that looked like what someone has today.
It’s an unfortunate fact that in our culture and our world we’re currently faced with economic and global conditions that no CEO, CFO or others in the C-suite are able to combat. The rank and file members of all races, colors and creeds are discriminated against just by the virtue of the growth of the global economy. A global economy also lifts people out of abject poverty, so how can we complain about that? Nothing in life is fair, and the economics of life today are certainly not fair. However, if the predictions for equilibrium and being able to have an increase in pay are accurate, we won’t see that until 2050.
In my work with my staff at BenStaff, we have one singular focus. That is to raise the value of the benefits that companies can afford to reach the beneficiaries at the bottom line.
Part of delivering what’s best for the beneficiaries is also to communicate the realities. If you’re in your 20s and you want to retire at age 45, then you need to prepare. You need to find companies that are willing to support your dreams and aspirations and you need to work hard.
This is neither a liberal nor conservative viewpoint. It’s just reality. Corporations have to fight the global trends and we in America who have aspirations to retire like the older generation have to adjust our dreams and aspirations to the reality that corporations can offer.