Aon Study: More ``Labor Days'' Ahead for American Workers?CHICAGO -- Aon's 2004 Replacement Ratio Study Reveals Over 75 Percent of Pre-retirement Income Will Be Needed Per Year To Maintain Standard of Living After Retirement Aon's 2004 Replacement Ratio Study, the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae retirement benchmarking tool in the industry, finds that the amounts employees need to retire have gone up, in some cases considerably, since last measured three years ago - creating the possibility that Americans will have to work longer and save more in the years to come. Replacement ratios - defined as a person's gross income after retirement divided by his or her gross income before retirement - employees need to maintain the same standard of living vary by income level. For instance, someone making $20,000 before retirement needs to make 89 percent from social security, private and employer sources, meaning they need to get a total of $17,800 from all sources per year. At the $80,000 income level, that figure drops to 77 percent. Three years ago, the $20,000-a-year earner needed 83 percent, and the $80,000-a-year earner needed 75 percent. "While managing their workforce in today's economy, employers need to look ahead to the demographic implications of the retiring Baby Boomers See generation X. ," said Chris Bone, chief actuary actuary One who calculates insurance risks and premiums. Actuaries compute the probability of the occurrence of such events as birth, marriage, illness, accidents, and death. for Aon Consulting and head of the company's retirement consulting practice. "The company's retirement plan needs to be appropriate for its industry, competitive, and perceived as a benefit that employees understand and will be able to use."
2004 Replacement Ratio Findings
--------------------------------
----------------------------------------------------------------------
Pre-Retirement Social Private and TOTAL
Income Security Employer Sources Replacement Ratio
(%) (%) (%)
----------------------------------------------------------------------
$20,000 65 24 89
----------------------------------------------------------------------
$30,000 56 28 84
----------------------------------------------------------------------
$40,000 51 29 80
----------------------------------------------------------------------
$50,000 48 29 77
----------------------------------------------------------------------
$60,000 43 32 75
----------------------------------------------------------------------
$70,000 39 37 76
----------------------------------------------------------------------
$80,000 35 42 77
----------------------------------------------------------------------
$90,000 33 45 78
----------------------------------------------------------------------
Aon Consulting, together with Georgia State University History Georgia State University was founded in 1913 as the Georgia School of Technology's "School of Commerce." The school focused on what was called "the new science of business. , created the Replacement Ratio Study in 1988, and the two organizations have updated the figures regularly since then, determining the replacement ratios necessary for individuals to maintain their standard of living after retirement. "Understanding replacement ratios is just one step for employers to undertake as they help their employees plan for retirement," continued Ron DeStefano, senior vice president with Aon Consulting. "The next step is to use those percentages to take a serious look at where the employee population falls at their organization. If a company has a large portion of employees that are not 'on track' for retirement, it's vital to analyze issues such as plan design and communication of plan benefits." In addition, Aon research finds that 41 percent of American workers don't think they will have enough money to retire, and 32 percent "don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. ." The Aon Consulting/Georgia State University Replacement Ratio Study(TM) offers detailed comparison of replacement ratios between 2001 and 2004, and also offers information on different family situations and analysis of savings rates Savings rate Personal savings as a percentage of disposable personal income. . In addition, Aon continues the research to cover higher wage earners (those earning up to $250,000) and the replacement ratios needed for those situations. For more information, or to request a copy of the study, please visit www.aon.com/retirement. About Aon Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. brokerage, human capital and management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects , and specialty insurance underwriting. The company employs approximately 52,000 professionals in its 600 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions. Aon Consulting is among the top global human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. consulting firms Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , with 2003 revenues of $1.185 billion and 7,500 professionals in 140 offices throughout the world. Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting. This press release contains certain statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future results, which are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, resolution of regulatory issues, including those related to compensation arrangements with underwriters, pension funding, ultimate paid claims may be different from actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin estimates and actuarial estimates may change over time, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. and other loss contingencies, and the heightened level of potential errors and omissions errors and omissions n. short-hand for malpractice insurance which gives physicians, attorneys, architects, accountants and other professionals coverage for claims by patients and clients for alleged professional errors and omissions which amount to negligence. liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion