Defining the Blueprint: Now is the time to forge a new social contract for retirement

Apr 26, 2019
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This article is part of the Forum Network series on New Societal Contract and will feed into upcoming discussions at OECD Forum 2019.

In my role as CEO of Aegon, I am often confronted with heartbreaking stories about people who are inadequately prepared for retirement. Many of these stories are about people who were caught off guard by life’s unforeseen circumstances and expectations of social safety nets that no longer exist. Such stories reinforce my belief in Aegon’s purpose: helping people achieve a lifetime of financial security.

Photo by Mario Caruso on Unsplash

In countries around the world, the long-standing social contract for retirement has crumbled. Governments are struggling with how to ensure the sustainability of social security systems. Amid funding issues, the defined benefit pension plans, traditionally offered by employers, have been replaced by defined contribution that are funded by employees, often with contributions from employers. Defined contribution plans shift responsibility for saving enough for retirement, and subsequently converting savings into a lifetime income, to the individual. Many people are inadequately equipped to take on this change in responsibility and are at risk of not achieving a financially secure retirement. Only 25% of workers globally feel they are on track to achieve their estimated retirement income needs, according to findings from Aegon’s 2018 survey spanning 15 countries.

At Aegon, we believe that the lessons from the current social contract for retirement can be applied to forge a new social contract that is sustainable, resilient and adaptable to our changing times. Our study The New Social Contract – a blueprint for retirement in the 21st century creates a call to action to not only analyse the situation surrounding retirement as it is today, but also to take a strong look at the social realities of the future.

With the fast pace of change, today’s workers are encountering different employment trends and will experience retirement realities quite different from those of their parents’ generations. The long-standing social contract has become outdated and is no longer tenable. It is now imperative that we re-evaluate retirement altogether.


Through a collaboration among stakeholders including governments, industry, employers, nonprofits, academia and community groups, Aegon believes there are four main principles that are integral to a new social contract:

  • Universal access to retirement savings plans so that all individuals have the opportunity to save.  Such arrangements should encompass vulnerable groups such as the self-employed or those who work intermittently to care for others. As people take an increasingly more flexible approach to their working lives, their retirement savings options should be flexible, too.
  • Working lives must be approached in a different way since retiring at 65 is no longer financially viable for many workers or societies. Ways in which workers can work longer must be explored and adapted, as well as tackling the issue of age discrimination in the workplace. A more flexible approach to retirement is required so that people can gradually transition by reducing their hours and/or working in a different capacity. Traditional career paths where individuals take on more responsibility and then suddenly fully retire no longer mirror the needs of either societies or individuals.
  • Sound health is essential for helping ensure people can work and enjoy life longer and must be promoted by all stakeholders. This, in turn, can benefit society as it will place less burden on healthcare systems. Governments, NGOs, industry, employers, healthcare providers and individuals themselves all have a responsibility in promoting healthier lifestyles. In addition, the correlation between health and wealth is undeniable. It is essential that people protect and maintain their physical health as much as their financial health.
  • Financial literacy must be taught continuously across life stages so that people can make informed decisions about their finances and plan adequately for retirement. Simply telling the general public is not enough. A sustained and collaborative effort on the part of educational institutions, governments, employers and companies in the private sector is required to educate people about what financial options for retirement are most beneficial to them.

Helping people build wealth and maintain good health are long-term commitments that none of us can ignore. If all of the stakeholders step up and work together, an age-inclusive society with sustainable retirement options can be within our reach. The time to act is now. If we can forge a new social contract as soon as possible, the current and future generations will benefit. At Aegon, we are fully committed to contributing to this effort and effecting positive change. We invite you to join us.

We are ready and willing for discussions on this topic. More importantly, we invite input and buy-in from stakeholders so we can make sure financial security is achievable for everyone. Questions that are on our mind include:

  • How can we create a more age-friendly world?
  • What needs to change so that people can transition to retirement at a time that is right for them?
  • What can we do as individuals to maintain our good health?

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Alex Wynaendts

CEO, Aegon

Alex Wynaendts was appointed CEO and Chairman of the Executive Board of Aegon N.V. on April 23, 2008. Alex has spent over 30 years in international finance and insurance. Educated in France, he began his career with ABN AMRO bank in 1984, working in the bank’s private banking and investment banking operations in both Amsterdam and London. Prior to being appointed as CEO, Alex held a number of different positions at Aegon, beginning in 1997 in Group Business Development. In particular, he established and expanded Aegon’s presence in new markets in Asia such as China, India and Japan, as well as the fast-developing region of Central and Eastern Europe. Following his appointment as CEO, Alex led Aegon through the economic crisis, ensuring the company maintained its strong capital position. He has subsequently redefined Aegon’s strategy, putting its purpose of helping people achieve a lifetime of financial security at the heart of the business. Central to this has been the digital transformation of the company, which has enabled it to better meet customers’ needs and engage with millions of new customers. Alongside his role as CEO of Aegon, Alex also severs as a board director for Air France-KLM, vice chairman of the Pan-European Insurance Forum (PEIF), board member of the Geneva Association, member of the advisory board for the Amsterdam VUmc Cancer Center and chair of the Rijksmuseum Supervisory Board.

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