The coronavirus pandemic is making the crisis in retirement planning worse, according to the Transamerica Center for Retirement Studies.

“The coronavirus pandemic and economic downturn are intensifying existing risks to retirement security, and creating an even greater urgency for a new social contract among governments, employers, individuals and other stakeholders,” said Catherine Collinson, CEO and president of the Transamerica Center for Retirement Studies.

“Retirement systems around the world also are undergoing severe strain due to increases in longevity, population aging, globalization and evolving employment trends,” she added.

The center recently released a study, "The New Social Contract: Age-Friendly Employers," based on information from 14,400 workers and 1,600 retired people in 15 countries. The study showed that globally and in the U.S., employees on average will need 67% of their current income in retirement, yet only 25% believe they are on course to meet that need.

Employers who help employees reach retirement goals are going to be needed to help solve the problem, the study said.

“Age-friendly employers are integral to a new social contract for retirement. By collaborating with other social partners, employers can help mitigate the retirement-related risks workers currently face and pave the way for a better, stronger retirement system for future generations,” Collinson said.

Employers can improve the situation by recognizing the value of workers of all ages, the center said. Only 37% of employees in the United States said their employer has an age-neutral workplace, and only 30% said their employer has an age-inclusive culture

Employers need to provide retirement, health and welfare benefits designed with portability in mind so that workers can maintain them as their employment situation changes. They also need to offer retirement planning services and financial advice, Transamerica said.

Financial training, education and wellness programs should be provided for employees, which is something only 28% of employers globally offer, the study said. In addition, workplace wellness programs and flexible work arrangements should be standard.

“The role of the employer in helping workers prepare for retirement transcends the offering of a job with a paycheck,” Collinson said. “Employers tremendously influence retirement preparedness among workers by providing retirement and other health and welfare benefits, offering flexible work arrangements, and enabling pre-retirees to work as long as they want.”

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