Anyone reading this likely is of the millennial generation and knows defined benefit pensions (payouts for life or a defined period based on term of employment) from companies have gone to shit and aren't returning. Gone are the days of putting bolts on a car at GM for 35 years and then earning $50k/yr until death... unless you already hold this job or other unlikely scenario. But who really wants that?
Defined contributions basically mean the employers helps you out with retirement contributions but once they've paid their percentage, it's too bad you're on your own for ensuring it's enough down the line. Skipping all the discussion on why end of life retirement is a failure from the start (see 4 hour work week book), there should be an emergence of a new type of pension. Services As A Pension.
Before quitting Apple to move abroad, I put in 5 years at the company. Not long for any baby boomer, but a lifetime for retail. And even amongst a thinning crowd inside Apple. The company is generous with the perks offered during your time at the company, no doubt. However, there is room for creativity given the cost of these services and the absence of defined benefit pensions.
Perks such as free iCloud storage for life, with a capacity limit which doubles each year you stay at the company. Or perhaps an Apple Music membership which lasts for say double the number of years you worked there after you leave. What about an allowance on iTunes/App Store from the company/year of work ie. $500/yr. And by allowing the "retired" employees to use their friends and family discount on products for the next X number of years.
This would be a three fold benefit to Apple:
Most of the sales staff, even the part-time ones, are bringing in hundreds of thousands a year for the store I worked at, and experts brought in significantly more! Offering a digital pension and retaining an employee to go from 3 years to 5 years, is literally over a million dollar difference, and in return. At $10/month an Apple Music membership for 5 years would result in a paltry $600... This equates to 0.06% if the employee ONLY sold $1,000,000 worth of product over the next two years! This doesn't factor in the assumption Apple is making 30% on Apple Music each month.
Considering the 200gb of iCloud storage, it can't cost much to run since energy is supplied by renewables, and the iCloud servers were set up years ago, likely meaning they're paid off. Apple is highly likely to collect a handsome profit on selling the storage space. Here's the proof, we all know Apple is fantastic at selling a in-demand product with a high profit margin. They don't sell storage space at a loss because in the most recent quarterly earnings, Tim Cook said the Services portion of Apple's income (aka iTunes/App Store/icloud/Apple Pay purchases, storage space for back-ups and apple music etc.) would be roughly a Fortune 400 sized company very shortly! And since it isn't costing them the price we are being charged, we can safely use the storage cost to estimate what the maximum it could be costing Apple for such storage. According to Apple support, the total cost per year would be a minuscule $48CAD/year. So over five years at $50 that would total $250, and make a grand total for the storage, and Apple Music of $850 (max) for the five years they offered these digital pension perks.
Obviously adding the 15% savings friends and family enjoy off on up to 5 items of each product per year would take the number a bit higher, but not higher than $10,000-12,000 max over the 5 years. And with Apple running at about 38% profit margin as a company, they would still make a profit.
It's widely reported giving employees perks such as tickets, time off, gift cards and other personal items are more appreciated than simply getting cash. Modern day companies should take a similar approach to their pension programs.
These services will be valued by young people and can be used before "retirement" has begun. Using Apple may seem like an easy example, so consider another well run company dominant in its industry: Sephora. This make up company could offer employees with terms of employment over X years discounts through the company app, free make-up sessions once a month or something along this nature.
To make this even more streamlined, companies could simply extend the perks currently offered to staff by a multiple of their time at the company.
What anyone consider that?