It’s broken. Two dreaded words that we hate to hear, but particularly in the context of delivering on promises made to public employees who invest so much time into their community.
Teresa Ghilarducci once said, “The American worker knows the retirement system is broken and they don’t like it.” The struggle with the overall retirement system has more to do with access and the difficulty of the decisions plan members must navigate; however, retirement for public servants has an entirely different set of challenges. Responsible for delivering benefits to more than 25 million members, pensions in the public retirement system are at a breaking point.
The breaking point for public sector pensions
For the people in the delivery trenches of these pension programs, the struggle is only increasing. Not only is there limited-to-no access to critical pension talent, but existing talent is also leaving or retiring. A complex mix of archaic pension technology and processes compounds this talent struggle, making it difficult to keep up with demands and expectations of real-time benefits delivery in a secure environment.
Over the last decade, the pervasive strategy has been to focus on modernizing the technology ecosystem, particularly the pension administration systems that are paramount to the experience members expect in the age of Amazon-like simplicity. These initiatives are a good start to helping repair part of what’s broken but may still not address the talent-gap issue.
Solving the public retirement system crisis
Public retirement systems must solve the talent crisis. The symptoms are only in the early stages of their impact and many retirement systems are already struggling to just hang on.
Those who have managed to wade through a modernization process should see some improvement in efficiency, but enhancements to member and employer self-service and the underlying transaction engines won’t be enough.
Maintaining and operating these new benefits platforms is growing more complex while the pool of talent with the right skills shrinks rapidly.
Public retirement systems must modernize their enabling technology and sustain the right talent for the coming decades. The history of the broader retirement system in the United States can be instructive and a critical source of insight in terms of how to think strategically before it is too late.
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While public retirement systems are relatively large compared to plans in the private sector, on their own, they still lack the minimum scale that’s necessary to attract and retain key talent in an efficient and sustainable way. Perhaps this is becoming increasingly obvious to executive directors and others in similar roles, but only a few thus far seem to be openly acknowledging that change must happen now. Retirement systems are operating like hundreds of small businesses, but the cost and complexity of creating the right mix of talent will demand a more centralized strategy.
Alight can be the trusted advisor in charting the right strategy for public pension systems. Let’s talk.
How Alight can help with retirement in the public sector
By modernizing technology ecosystems and addressing talent gaps, Alight ensures that public retirement systems can operate efficiently and sustainably. This support extends to more than 7.6 million public sector members. Our expertise in defined benefit, defined contribution, retiree health, and overall wellbeing through the Alight Worklife platform offers a simplified, connected experience for a variety of public sector retirement systems.
Alight is a leading cloud-based human capital technology and services provider for many of the world’s largest organizations and over 35 million people and dependents. Through the administration of employee benefits, Alight helps clients gain a benefits advantage while building a healthy and financially secure workforce by unifying the benefits ecosystem across health, wealth, wellbeing, absence management and navigation. Our Alight Worklife® platform empowers employers to gain a deeper understanding of their workforce and engage them throughout life’s most important moments with personalized benefits management and data-driven insights, leading to increased employee wellbeing, engagement and productivity. Learn more about the Alight Benefits Advantage™ at alight.com.
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