Aging Demographics

Aging Demographics

Aging populations are pressuring plan benefits

Life spans are increasing while plan participation is declining. The needs of pensioners and active participants are diverse. Plan sponsors must consider how aging demographics are impacting allocations and their plan’s financial wellbeing.

Americans today are living longer than previous generations

We believe pension plan sponsors should explore return enhancing and income strategies before taking on riskier growth assets.

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Source: Social Security Administration, 2005, author’s calculations, the Hamilton Project of the Brookings Institute, 2017.

Active plan participants are in a steep decline

With less active members, pension plan portfolios may take longer to recover from financial shocks. We believe that when retirees outnumber active plan participants plan sponsors should seek to increase income before taking on risk-based assets.

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Source: US Department of Labor. As of December 2018.

Let us help solve your pension plan challenges

Invesco’s Turning Points Guide features our latest thinking on defined benefit trends, with actionable steps to help optimize plan outcomes.

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Turning Points