|
CAN the
young workers carry the burden? Should seniors be
worried? Indeed, these are life-and-death questions for
those now in the dimming world of their lives,
especially with a possible global financial, and thus
economic, meltdown flowing from the United States.
This was
underlined by a remark by Gene Wickes of the private
consultancy firm Watson Wyatt Worldwide Inc., who said,
“The pressure would be on young workers who would pay
through their taxes today for the elderly population’s
retirement.”
Wickes,
global director for the benefits consulting practice of
the firm, based his views on Watson Wyatt’s study in
2006 that found nearly 1,500 employers across
Asia-Pacific identify aging as having a serious economic
impact.
Watson’s
Association of Southeast Asian Nations managing director
Andrew Heard noted the Philippines has a competitive
advantage in resolving the aging problem because of the
abundance of its young work force.
But he
said, “The biggest challenge for the Philippines is how
to keep that young work force inside and keep them from
leaving the country,” highlighting the fact the
Philippines is among the world’s top labor exporters.
He said
the financial meltdown in the United States exacerbates
the demographic “storm” hovering across the world. “What
the meltdown endangers is the security of people’s
retirement, and that, in turn, puts more pressure on
businesses to look at ways on the types of retirement
plans that would work.”
The
financial meltdown adds more weight to this impact,
Wickes added, as earnings are shaved and profits are
trimmed while companies are still obliged to give
benefits to their employees.
Japan is
a picture of what may be in store, according to Heard.
He said Watson Wyatt’s research shows that Japanese aged
50 or over are expected to hit 51 percent of the
population by 2030.
Heard
said some countries would have a similar situation
wherein there’s an almost equal proportion between the
number of young people working and those retiring.
To pay
for the benefits of those retiring, Wickes said most
states now prefunding pensions may have to tax young
workers more.
The
question is, “Who will fund the benefits of the 1
billion people in Asia over the age of 60 by 2050?”
However,
Wickes acknowledged it is anybody’s guess what will
happen. “We can’t read the market; we can just identify
the strategies.”
He added
that Watson Wyatt doesn’t have any stake in the global
investment banks that folded up in the past two weeks.
The company posted revenues of $1.8 billion last year,
60 percent of which came from consulting services on
benefits and retirement. |
