With different generations in the workplace requiring personalized approaches, the pension industry is reimagining traditional savings plans, said Brady Aarssen, assistant vice-president of business development strategy at Great-West Life Assurance Co., speaking at Benefits Canada’s 2019 DC Plan Summit in Banff, Alta. in February.
Millennials, for instance, are the largest segment of the workforce, they’re the most educated, have more spending power and are more influenced by non-monetary work benefits, he noted, but they also have more student debt, will start families later and have more difficulty in the housing market.
Read: Redefining the traditional retirement journey
“Often when you’re the youngest generation in a particular environment, you feel like the deck is largely stacked against you, the solutions are built for somebody else . . . and they don’t satisfy your needs,” said Aarssen. “And so I think that’s the challenge we face in the DC environment for millennials — if you really think about our plans, they’re about . . . accumulation and decumulation. They don’t address any of these things at all.”
The industry can’t call use the term “retirement plans” anymore, said Aarssen, noting each stage in life requires a very different solution. “We all want to have things that work for us and for our needs at that time in life. . . . And when we think about the DC and DB plans of the past, they were built for two or three generations to try to satisfy 70 or 80 per cent of the population.
“We’re now in a world where you could even argue that we have five generations . . . it’s hard to be utilitarian when you have that much diversity.”
Read more coverage from the 2019 DC Plan Summit.