What an aging population means for the global economy

Lindsey Hall, I'm Lindsey Hall.

And I'm Esther Wheeldon.

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Welcome to All Things Sustainable, a podcast from S and P Global. As your hosts, we'll dive into all the sustainability topics that are reshaping the business world.

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Join us every Friday for in depth analysis and interviews with leaders from around the globe. Together, we'll break down big sustainability headlines and cut through the jargon.

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In 2025, I saw Larry Fink speak during Saraweek. Saraweek is the big energy conference S and P Global hosts in Houston every March. And Larry Fink is CEO of the world's largest asset manager, BlackRock, which has $14 trillion in assets under management. So when he says something, people tend to listen. What he said that caught my attention was a remark he made on stage about retirement as a looming problem that doesn't get enough attention. In fact, he called retirement, quote, a crisis that we don't talk about. Well, today's guest is uniquely placed to comment on retirement longevity and how AI is reshaping the workforce. We're talking to Pat Tomlinson, the president and CEO of global consulting firm Mercer. Mercer is a business of professional services firm Marsh McLennan, and Pat took the reins in 2024. In recent years, the company has worked with the World Economic Forum's Longevity Economy initiative. The to bring together leaders from business, government and civil society. And the goal of this initiative is to align across sectors on how to address the demographic and financial challenges of aging global populations in 2026.

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Aging populations and the workforce are key topics we're watching at S and P Global. We expect that global population aging will put increased pressure on labor markets. To put some context behind that, the United nations estimates that in 2026, the proportion of the world's population aged 65 or older will surpass 10.5%. That's up from less than eight and a half percent just a decade ago. In the US more than 4 million Americans will turn 65 this year as the baby boomer generation nears peak retirement age. At the same time, the number of Americans turning 18 is projected to begin an extended period of year over year declines, marking the start of what's been called a demographic cliff.

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In our interview, I asked Pat how companies and governments are thinking about these dynamics. You'll hear him mention the cbo, that's the US Congressional Budget Office. He also mentions the oecd, that's the Organization for Economic Cooperation and Development and DC or Defined Contribution Plans, a type of retirement plan. Okay, here's our interview where Pat starts off by describing his role.

2:20

So I am the global president and CEO of Mercer. We are leading human capital consulting and investment consulting business around the world. Right. We focus on clients and helping them with a few major challenges as they think about how to drive their businesses forward. Mostly focused around the health of their workforce and the health of population. When we work with public sector, working around investment outcomes and making sure people have a healthy retirement, and then finally around human capital and making sure that people are working in the right jobs, they've got the tools that they need that we think clients think about the workforce of the future, what's the appropriate pay, skills that people need and things like that as they think about how to work, how to go ahead and build the appropriate careers for their colleagues so they can have the right progression to go ahead and move forward. We operate pretty much around the world in about 80 countries. We've got about 23,000 people. And really looking forward to talking to you today.

2:42

Well, thank you. And you mentioned the work that Mercer does on retirement, so maybe we can start by digging in a little more there. What should we understand about the work you're doing on retirement and longevity?

3:40

So when we talk about longevity, we're talking about a few components. First thing we're talking about is the increasing lifespan of people around the world. So on average, our lives will be 10 years longer than our parents and probably about 20 years longer than our grandparents. For a Data point like one in six Americans today is over the age of 65. So, you know, an aging population at the same point, besides the fact that we've got an aging population, we also have fertility rates declining. Right. So the confluence of these phenomenon are going to have a big impact on business, on economies, and then on individual things like retirement and how employers might think about helping people save for retirement, how individuals have to think about saving retirement, and then how governments have to think about making sure that their populations have enough retirement savings as they go forward. So increasing age, decreasing birth rates. In fact, the CBO is projecting by 2033 that deaths will exceed births in the United States. So we'll start to actually see population decline absent any kind of immigration. And then the other big challenge that we start to see is the longer you live, a longer life doesn't necessarily guarantee a healthier one. Right. So the healthy life expectancy of an American is only about 65 years. So those last few years, obviously you wind up with a bit more health costs and concerns and things like that. And then we get into retirement. Right. So additionally, we start to Think about the fact that somebody who's living a much longer life has to start to think about how to save for a much longer life. And since we're talking about Americans in This example, about 1 in 5Americans age 50 or above don't have any retirement savings at all. Right. So 20% of Americans over the age of 50 do not have any personal retirement funds. So they'll be solely relying on public Social Security in public retirement savings. So that's obviously becomes a very major factor as we start to think about how to handle retirement as we go forward.

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And one of the things that I heard last year that really piqued my interest was I attended Sarah Week in 2025, and that's our annual energy conference that S and P Global hosts that convenes stakeholders from all across the world. It's kind of known as the Davos of Energy or the super bowl of the energy world. And BlackRock CEO Larry Fink was speaking at that event, and he called retirement a looming crisis that no one is talking about in the US and he said, we believe retirement is one of the great crises of America that no one wants to talk about. Does that resonate with you?

5:59

Yeah, it definitely resonates with me. I would say that if we think about people living longer, as I was talking about earlier, and I was talking about, like, retirement savings, we can start to think about the real challenge to an individual and the crisis that Larry would be talking about is how fast they will outlive or how long they will outlive their savings. Right. So I talked about 20% of the people don't have any savings at all. But in OECD countries around the world, the average person will outlive their personal retirement savings by 12 years. So that's 12 years that you're going to be reliant on the public sector and Social Security and whatever that looks like in whatever country you live in for your level of income. For women, it is even more challenging. In some countries, it is up to 19 years, right? That typically has to do with women, women living longer. Typically, women tend to make less in their working lives from a variety of reasons, like a role they had, as well as something we would call work density and the amount of time they were able to spend in the workforce, because typically women have come out of the workforce for certain family obligations, whether it be raising children or assisting with elder care for family members and things like that. So it really becomes a challenge for women. And that becomes a significant issue as we think about what's going to happen as we go forward. And I agree that it's something that we don't really talk about that much. There are topics like AI and technology or the challenges we have around weather that typically comes up quite a bit, maybe in climate, but longevity and people living longer and the fact that they will have real significant savings challenges is one of them. The one I would add on top of Larry's comment would be around healthcare. Because the other thing that is quite simple is with age comes more illness and more age related disease. And the real challenge that that's creating not only for those people, but honestly for everyone else is an aging population is tying up the capacity of the entire healthcare system. Right. So the healthcare system's not growing fast enough for the aging population that we have. And that's a pretty much universal around the world. This is not only an American phenomenon. And what that's doing is that's limiting people's access to care. Not only older people who need the care, but actually everyone, because it's just tying up the capacity. What that's doing for everyone is it's impacting the quality of care. Right. Because quality of care typically means the way to really get a high value outcome there is to get to the appropriate medical provider as early in your diagnosis process as possible. And that gives you your fastest and your best chance at recovery. And if capacity is tied up, that creates significant challenges. The other thing it does, which is something I think everyone feels today, is it's driving up the cost. Right. It's a simple supply and demand component and really starting to drive up the cost of health care not only for older people, but for everyone, simply because so much of the demand is tied up by an aging population.

6:36

Well, we certainly agree with what you're laying out here that this is an important topic. And just this morning, S and P Global has released its annual sustainability Trends to Watch report. And one of those top 10 trends we're watching is aging populations and workforce. And we find that global population aging is going to put increased pressure on labor markets. And even with AI driven productivity enhancements and migration trends, we don't think that that is going to provide the relief that's needed to address this problem. So given this landscape that you've laid out for longevity, for retirement savings and for healthcare, can you talk to me about what some of the solutions are and perhaps some of the work that Mercer is doing in this space?

10:03

Yeah. So first off, when we think about solutions, we're typically either working with public organizations or public entities. So think public sector or we're working with large employers and starting to help them think through how this is going to work effectively for their workforce as they make sure they help them prepare for retirement. And we help them think about what their workforce will be with a shrinking workforce because one of the other dynamics of this lowering birth rate is that there will be a smaller workforce aging through the population over the upcoming decades. So some of the ways that we've been working with clients on this is really being focused on how do we think about public and private collaboration. Right. So from an employer perspective in corporations, how do we think about the health and benefits packages that they offer? Right. Can we think about encouraging preventative care and education? So if the point I made earlier around access to care, even for earlier younger populations, it all being tied up well, if you can get, if you can get better with preventative care, maybe we could prevent illness in the first place and that will keep them a in the workforce as well as keep them healthier because they're going to run into constraints and capacity if they have to enter the healthcare system. So obviously employers finding ways to encourage preventative care and do some education, thinking about long term for them, how do employers think about providing access to long term care insurance as they start to help their employees plan for retirement and for living longer to the point where they might not be able to support themselves from an age perspective and being able to take care of themselves, how do they think about that? Things like caregiving, benefits. So really trying to help corporations think about that. Additionally, we also are focused in on how can employers keep their workforce growing to sustain their growth and their success. And so they have to think about new ways to access the workforce if the workforce is going to be more aged. And how do they think about bringing older workers into the workforce through things like phased retirements, things like job sharing. Older workers potentially have some reskilling that they would do. So how do we think about how to go ahead and help employers focus in on those types of areas? I think that there's lots of opportunities that they can go ahead and fill the gaps to go ahead and drive their businesses forward as well. Think about between governments and corporations, the use of technology to just get more things done. A good example probably is if you've gone to airports in some of the major cities around the world, you can actually get into the country in some cities now without ever interacting with a human being. Right. Everything is completely facial recognition driven. You enter into a series of cube kiosks and you can enter into and out of countries that would have never been thought of five or 10 years ago. So things like that. But really that's what I would say is a lot of focus there and then the governments on having innovations and having interventions to be able to help incent corporations to drive this forward. There are a few really good examples I would say around the world over the last few years that different governments have introduced to help. That public private partnership that I was talking about originally, a couple of examples might be in Singapore, was a good one. They introduced a part time re employment Grant back in 2020 as part of a senior worker support package. It's really designed to incentivize employers to offer part time re employment or other flexible work arrangements to senior workers to get them back into the workforce. Right. Because they felt like they needed to supplement that. Additionally, reskilling comes up a lot. So how do we support reskilling? France and Denmark both have really good examples of that. The Danish government invests pretty significantly in education and in training. More than about 20% of their workforce participated in adult education programs a couple years ago in 2023. So that's a really good example of the government kind of supporting the workforce upskilling. And then France has this very interesting thing around lifelong learning accounts where citizens get credits for reskilling and for professionals training at any point in their lives. So they've worked that out to where they can go ahead and focus in on there. So those are probably some of the good examples that have worked already on government innovations to try and keep the economies moving forward.

10:48

Well, really interesting to hear how different parts of the world are addressing this challenge. And I understand that since you took on the CEO rule at Mercer, you've been traveling around the world and talking to executives and policymakers about longevity, health, retirement. Did any of those conversations stand out to you?

15:22

Yeah, so I think probably one of the more interesting meetings I had with a government official down in in one in a South American country where they were trying to really actively deal with an increasing in aging population and the retirement benefits, tying up such a significant portion of their public sector budget between retirement and healthcare. And they got really creative around how to think about how to change their public retirement system to encourage and to have as mandatory more employer based contributions into a DC type plan for retirement. And the really unique thing I think that was there was not only that they did they increase the contribution that was there, but they required a different contribution for women versus men. Taking into account what I was talking About a bit earlier that women tend to live longer than men. So it also took care of that as well as that women tended to earn less over their lifespan. And so they actually have a higher percentage savings requirement by employers contributing into the fund for that. So I think there's a lot of creative ways that people are starting to think about how to help solve for retirement.

15:40

So I understand that Mercer did a 2025 executive outlook study that showed 80% of executives believe they could be doing more to mitigate the risks of an aging workforce. For our business audiences listening or for our employers who are listening, what should they do to mitigate the risks of an aging workforce?

17:00

Yeah, so a few things that I think that they could be doing is finding ways to entice an aging workforce to remain with them and stay in the workforce. Right. So I think first thing is they need to start workforce planning. Right. So from a perspective they really can think about what their future workforce needs and start to think about what the skill set that they're going to need as they think about it going forward. Because there will be a smaller core working group of what they would say working age employees in the future. Right. So really understanding where they could do that and then they could build, from a strategic perspective, they could build those programs in there. Then what I think they should do is they should be really thinking about how to go ahead and access this skilled talent force to be able to help drive their businesses forward. Right. So first off thinking, how do I keep employees engaged past retirement age? So Today only about 32% of organizations offer phased retirement programs. So that's an area where they can think about that. What would that look like? It might look like offering an older worker different employment options. It could be that it's job sharing, it could be that it's a project based role. It could be that it's a gig assignment or something like that, or it's simply that it's flexible part time in areas like that. Probably a really good example we had is we just have helped a large consumer goods company with this exact issue. Specifically in their R and D team where they had a lot of deep technical expertise and they were losing it because of retirement. And they needed to find a way to retain the talent or at least find a way to supplement all the work that and expertise that they were losing. We helped them introduce a phase retirement program. It almost looked more like a gig program where it allowed recent retirees from their organization or actually even from some competitors where they had the right skill set. To take on projects and pretty much almost create like a talent marketplace for retirees to do very specific R and D projects that they needed to be done. And since it was consumer goods, they had plants all over the world. So you could actually do this where you were based or you could actually decide, I'm going to go somewhere else for three or four weeks and do it there. As they needed that type of activity, so gave people a bit more flexibility of how to be able to do it. So things like that are where we're really seeing clients focus in. And how do they get them more engaged in gig work like the example I gave. That's I think the major area. And then keeping in mind flexibility and the value that older workers place on that flexibility, whether it be location based flexibility like remote working. Right. So we did a, we did another survey in 2024 at the end around workers and where they wanted to work and live. And we had about 2 in 5 workers age 55 and above preferred remote work to in office work. Right. They already had the skills, they already had the experience that they were looking for that as an older worker. The reality is when we also in the same survey asked how many it was offered for, only 25%. So one in four were actually offered remote based work. So a real disconnect there. Right. I think we also have probably about half of all employers push like 45 to 50% of older workers want a hybrid model. Right. So they want something to where they can flex a bit. This is not retirement benefits or health benefits. This is actually work design. And how do you construct the jobs and the roles and make them appealing to the workforce and the skilled workforce that you're going to need as you go forward.

17:19

It's so interesting to hear you highlight flexibility as well because we heard a lot of emphasis on flexibility in working arrangements around the pandemic. But I feel that the pendulum has swung a bit the other way and there's this push for people to return to office. Remote work is becoming less common. But you're saying that there, there remains this value in a flexible approach, if I'm hearing you correctly.

21:10

Yeah. Especially as you're trying to access certain talent pools. Right. So if we think about like anything we would help a client with, we would think about specifically what are the skills they need for the objectives they want to accomplish in the role. And then we could you market map against the talent that's there. And if you're into specific areas and you're really feeling like you, you want to Access older workers. What we're saying is a very, very popular feature of what older workers would like in a flexible work environment would be work location and then also some kind of non full time hybrid ish model. Right. It's something to keep in mind if the business model and what they really need is they feel like that that's the talent pool that they need to access.

21:34

So we're having this conversation mid January and I understand that next week you'll be heading to Davos where you'll be talking about some of these topics we've been discussing today.

22:20

Yeah. Yes, we will be discussing longevity and a variety of other things in Davos next week.

22:30

What kinds of conversations do you expect to be having with this audience, this crowd?

22:34

So I think next week we will still be pinning in on what you kind of asked in the original question around making sure that this looming challenge and crisis that's out there that will come, it has the prevalence that it needs to have that people understand the dynamic that will occur between healthcare, between retirement and between making sure that we have a large enough workforce to continue to drive economies forward. I think that'll be the main theme as we think about how to talk about longevity and the impact that it's having. I think additionally we will start to think about how longevity fits into the long term plans of making sure that we've got flexibility in work and the types of things that we're talking about right now. And then programs and what are examples of programs that are working around the world similarly to the ones that I mentioned earlier, where people can try and keep older workers involved. This is a challenge that while we talked about United States data earlier, World Economic Forum in Davos is typically much more of an international type of environment. This is a challenge that is a quite a significant challenge in many, many areas of the world from a population perspective. We know that Italy, South Korea, Japan, China, all having significant issues regarding the birth rates and long term demographic shifts that they are going through. And so this is a very topical conversation for how to make sure that we can go ahead and drive work going forward and start to think about that.

22:39

Well, Pat, if we could pivot in these last few minutes here just to talk a little bit more about your personal story. Whenever I get a chance to talk to a CEO on this podcast, I like to ask, how did you get there? How did you come to that role? What's been your personal journey to where you find yourself today?

24:11

Oh, well, sure, I'm happy to do that. Actually, I went to West Point. So right out of school I went in the United States army, went on a few deployments. It's a great experience to be able to go ahead and be entrusted at a very early age with leadership of various units and soldiers as we go out around the world and conduct missions. When I got out of there, I came into financial services, did a little bit of equity trading for a bit, and then moved into HR or professional services almost 30 years ago. Worked at a small boutique originally and went ahead and then moved into larger organizations. Really focused with clients, Spent a lot of time with clients on human capital challenges. Really starting to think about how do we go ahead and have the right people in the right places with the right skills, how do we move them up through organizations, how do we pay them effectively, how do we attract them, how do we retain them? And really what that allowed me to do is have a lot of experiences with very senior level client HR and business executives at an early age as I work through that as a strategic human capital consultant with them, specifically around how to build hiring and recruiting and like those type of programs. Came over to Mercer about 11 years ago to lead one of our businesses here in the US and have really been moving and working through the organization as we've helped clients go ahead and drive value across their healthcare systems and those programs, through their retirement systems and through their overall people Strategy. And became CEO a couple of years ago after leading our U.S. business and various components of our U.S. business for the past five to seven years.

24:27

Okay, what point in that career path did you say? Okay, I think I'd like to be CEO or I have my sights set on being CEO.

26:01

I'm not sure I ever really thought about I being the CEO probably until it was time to talk about being the CEO from a leadership perspective. I think one of my foundational strategies is go focus on the task at hand and focus on the teams that you're working with right now and make sure that we're trying to drive value for clients, we're trying to build good careers for our colleagues. We obviously want to go ahead and deliver the types of outcomes we need to deliver for our organizations and for our businesses. But focusing in there and not really worrying about how do I become the CEO was a key foundational piece for me. And really just making sure that understand what are we trying to accomplish today? What's the mission? How are we focused on driving value, how we focus on making sure we can move the business forward, how we focused on making sure that colleagues can go ahead and see themselves here can go ahead and thrive, can go ahead and build themselves. A career was always my main piece of it. And then at some point a lot of becoming a CEO, I would say most people would probably say the same thing. Becomes a lot of hard work, a lot of determination, a lot of dedication, but also a lot of luck. Right? You know, you wind up in a role that winds up being a high profile role. You wind up working with a client that becomes a very high profile client. You do a really good job, people notice, and you just kind of goes from there. But a lot of it is luck. Besides, for all the hard work and dedication that goes into it, I do.

26:09

Hear versions of that or people certainly say that I talk to for this podcast say that they had a perhaps circuitous role. They didn't set out with that CEO role in mind. But I'm always fascinated to understand how people approach leadership, which isn't necessarily something that gets a lot of airtime in sustainability discussions, but I think it's such an important part of human capital management and how you retain your workforce. So thank you for sharing your approach to leadership. Pat. I've asked you lots of questions today, anything that you you wish I had asked or anything that you think I should ask to get across to our global audience that's trying to understand the landscape for longevity and retirement and workforce.

27:29

In closing, if I could just reiterate the importance of this topic and the long term impact that it will have on pretty much everything, everything we do across business and across society, really making sure that people understand that the impact it has on the health system is critically important for all of us, not just for older people. The impact it has on the retirement system impacts all of us, not just the older people. And then obviously the impact on having fewer workers as people age and there's been a lower birth rate will impact employers and will impact business and will impact society as we think about how to grow gdp. So we have to get after that right now around how do we leverage the new and unique ways to go ahead and do work, whether that be leveraging AI or technology or any type of new innovation that comes up over the next five to 10 years to make sure we stay in front of this, because the demographics, the math is there that there will be a shrinking workforce for us as we go through this century.

28:11

Pat, thank you so much for taking the time to sit down with me today and share your perspective with our audience.

29:23

Great. Thank you for having me.

29:28

Today we heard from Pat about the landscape for longevity, Retirement Savings and Healthcare we heard that retirement savings and the healthcare system need to evolve to meet the needs of the aging global population. We also heard about some of the solutions that employers and governments around the world are considering to address these challenges, including through public private collaboration.

29:30

This is a topic we'll continue to track on this podcast as it has big implications for the workforce and the economy. So please stay tuned.

29:49

Thanks for tuning in to this episode of All Things Sustainable. If you like what you heard, please subscribe, share and leave us a review wherever you get your podcasts.

29:58

And a special thanks to our agency partner, The199. See you next time.

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Sa.

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