An e-Newsletter for Retirement & Benefit Plan Sponsors
July 2011

The Tipping Point: How the aging of America is altering employers' approach to work life and benefits

Tom Joseph
Senior Vice President
Bank of America Merrill Lynch
Retirement & Benefit Plan Services
Joe Coughlin, Ph.D.   
Director of Massachusetts Institute of Technology's AgeLab

As the workforce ages, employers are finding new ways to help individuals work well and live well longer through a variety of programs and arrangements, including the creation of more flexible work environments. This approach goes beyond telecommuting to include arrangements for care-giving, flex time, benefit plans and other solutions aimed to help employees achieve their financial and lifestyle goals in retirement.

With 76 million Baby Boomers reaching traditional retirement age at an unprecedented rate of one every seven seconds1, companies that can offer such programs will have the upper hand, and many can’t afford to not approach their workforces and workplaces differently. Bank of America Merrill Lynch’s Tom Joseph, Senior Vice President, Retirement and Benefit Plan Services, Business Strategy and Analytics, recently discussed this topic with Joseph Coughlin, Ph.D., Director of the Massachusetts Institute of Technology’s AgeLab. Mr. Coughlin was named by the Wall Street Journal as one of “12 pioneers inventing the future of aging and how we will all live, work, and play tomorrow.” His research seeks to understand how demographic and social trends, human behavior, and technology converge to drive future innovations in business and government. He publishes much of his research and ideas on

Tom Joseph(TJ): We’ve all heard the news and statistics about the aging population on a global scale. Add to this the fact that workers in their peak earning years are woefully unprepared for retirement with a $6.6 trillion gap between the money they’ll need for retirement and the money they’ll have.2 Would you say that the tipping point has arrived, requiring employers to innovate and change the way they do business to become “age ready?” 
Joe Coughlin(JC): Most definitely. The conversation around aging has become a conversation around re-inventing tomorrow. There is a global demand for innovation, meaning we can’t keep managing a workforce and servicing customers as we have historically. For the first time in history, [research has found] there are more people over age 60 than under age 15. And they’re not the 60-year-olds we knew when we were young. They are not "aging quietly," so to speak. This demographic is redefining “old age” and retirement, creating what I call disruptive demographics.

TJ: Can you tell me more about disruptive demographics?
JC: Remember Y2K? That’s an example of disruptive technology. Companies need to keep up with continuously evolving technology as it helps them to be more competitive, and better meet customer and employee needs. That said, a company’s greatest asset is still their employees; so engaging, motivating and retaining them is critical. Disruptive demographics make this all the more challenging. First, we need to understand the psychographics and demographic trends. Half of babies born today may live to 100 years old – this changes everything. Do we live longer and keep doing the same thing? Or do we keep working, travel more, and so on? What about healthcare and home care as the population is aging for longer periods of time? People are more at risk of outliving their assets than ever before, creating longer work-lives and the need for greater income planning.

TJ: How are age-friendly employers able to drive higher employee engagement – considering the range of diverse demographics and evolving needs?
JC: It is important that we move away from a one-size-fits-all approach and develop personalized benefits and programs that resonate with individual employees in a scalable way. And the solutions that work best are holistic, meaning they are moving away from siloed discussions about specific products and services to a complete activity focus. For example, eliminating the lines between finance, healthcare, flex-time, life-long education, and so on, allows for a comprehensive offering. This approach also helps sync up the vast amount of information that is available to cull out the information that will influence and validate actions more effectively.
Engagement initiatives – communications, activities, etc. – also must be easy, exciting and fun for all age groups. With today’s era of gadgets and “apps,” the way to engage employees and keep them engaged is by keeping things relatively entertaining and mindful of the limited time any of us have to allocate to any topic.

TJ: So it sounds like innovation is going to play a key role in how we engage employees going forward.
JC: That’s right. This is not your father’s old age, nor his workplace. Innovation can be a bit intimidating, but it’s really as simple as putting practical new ideas into use that help enhance and personalize services and experiences. Companies that are able to implement creative solutions successfully will stay ahead of the pack attracting, retaining, and improving the productivity of key talent.

To discuss “age-friendly” solutions you can implement in your company, contact your Bank of America Merrill Lynch representative. We also encourage you to check out the innovative series of Merrill Lynch retirement webcasts hosted by Charles Gibson, including “Second Acts” which is focused on retirement-age well being. Additional resources are listed below as well.

Financial Wellness: Holistic planning for retirement tomorrow 
Link to BofAML’s Life-stage approach to communications and education interactive tool
Advice Access 
2011 BofAML Workplace Benefits Report

1”Leading-Edge Boomers Still Going Strong”, AARP, 2010.
2”A $6.6 Trillion Shortfall: Retirement income gap is a wake-up call for Americans, AARP, 2010

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