Leaving the workforce only to return has been a growing trend for “older workers.” In the face of longer life spans and the rapid pace of change, there are more questions than answers facing midlife workers—and employers, many of whom are finding their way into new scheduling arrangements and benefit plans.
Living Longer: Working Longer Too?
As the notion of working until a set edge before setting off to travel, golf, or grandparent, fades ever faster into the sunset, the very definition of “older workers” is shifting. Many put off even thinking about a set retirement date, as others, just as the name Generation Unretired implies, embrace returns to paid work of some kind, whether from financial fear or a desire to stay active and engaged:
While many Gen U return to work to reduce the longevity risk of running out of money in retirement, others go back to work to stave off the wellbeing risk of endless days, weeks, and years sitting on the couch in front of the television….Gen U are looking to work, but not in the way they may have decades earlier. They seek flexibility in what work means and how it fits into their later lives. They are looking for transitions or phased retirement rather than hard stops marked by arbitrary expiration dates imposed by yesterday’s idea of work and retirement. Part-time work, job sharing, gig work, and consulting are all part of a new life stage in retirement. Unfortunately, these work options often fall outside current employer policies and work processes. In some cases, despite well-intended government policy, regulations often make it challenging to impossible for employers to hire former employees.
With both employers and employees juggling new ideas about what is preferred and possible in the face of longer lives, there is indeed a lot to figure out. Thought leaders remind us that there is good news, and though not necessarily bad news, many challenges to figure out alongside the privilege of longer life spans: “…You don’t know how long and whether your lifespan will outlive your wealth span. Statistics suggest that more than half of us will make it past 85-years old. Have we saved enough is one question. An equally important question is, have you planned for all the things necessary to live a quality life well into your old age?”
At MIT’s AgeLab, Dr. Joe Coughlin points out that the ultimate risks of a secure retirement as we confront “working longer in a faster world” are likely quite different than the typical risks retirement plans, and even ERISA standards, were designed to address:
ERISA’s original intent was to ensure retirement income security. Today’s employees are navigating a high-velocity world of changing markets and fast-moving technology. Just imagine the possible changes in the global economy and technology over a work life extending over 50 or 60 years. The ultimate risk to financial security may not be in retirement but simply remaining competent, competitive, and adequately compensated across the work span. The rapid pace of technological innovation is reshaping the nature of work, making it essential for individuals to acquire new skills throughout their careers. Education or skill security may become as important in the next 50 years as health and retirement security. Entire industries, let alone jobs, will disappear within a single lifetime. Others may emerge, but will a national education and training infrastructure be in place to reskill and upskill workers in their 30s, 40s, 50s, 60s, and beyond?
Steering Forward
With so many new questions to address, one thing is certain for employers: sponsoring a retirement plan helps: “retirement confidence is “more than twice as high among those with retirement plan coverage than among those who lack it.” As Groom Law Group reminds us: “Being a fiduciary is about more than just avoiding lawsuits—it is about improving participant outcomes.”
As plan sponsors across the country row forward in the face of so much change, so fast, it’s an especially wise time to put solid protections in place. As a leading, national and Treasury-listed writer of ERISA Fidelity Bonds, Colonial Surety Company, is pleased to make it easy for plan sponsors to substantially reduce their own liabilities via fiduciary and cyber liability coverage. Opt in to add Fiduciary and Cyber Liability to your ERISA Bond, and for less than a few dollars a day, you’ll immediately have documented proof of cybersecurity coverage for the business and plan, and defense costs and penalty limits up to $1,000,000 for yourself, if faced with alleged or actual breaches of duty in connection with the employee retirement plan.
ERISA Bond+Liability Insurance HERE
Need Help?
Our knowledgeable, New Jersey based ERISA service team is available directly, Monday-Friday, 8:30am-5:30pm EST at 888-383-3313 and via email: erisadept@colonialsurety.com.
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