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Retirement Readiness with Thurstan Robinson

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Presentation at the 2012 Edinburgh IBIS academy by AGEON, on preparing for the future of pension.

Presentation at the 2012 Edinburgh IBIS academy by AGEON, on preparing for the future of pension.

Published in: Economy & Finance, Business
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  • 1. Retirement readiness – preparing for the future of pensions Thurstan Robinson
  • 2. 1The world is changing
  • 3. Ageing populations are rising globally… Average Life Expectancy (in years)
  • 4. More than you may think…And the trend does not seem to be slowingHow long are we going to live?True life expectancy (with future improvement) if past 10 years are indicative Current 2050 Low Expected High Low Expected HighNL 84.7 / 86.6 92.2 / 93.7 123.3 / 127.0 88.3 / 90.0 95.2 / 96.4 157.3 / 161.5UK 85.8 / 87.8 94.4 / 95.6 126.9 / 128.4 89.2 / 91.2 98.6 / 99.6 166.6 / 168.1US 76.6 / 82.6 90.7 / 94.1 115.8 / 131.7 74.2 / 82.6 95.4 / 98.7 147.4 / 183.5
  • 5. ……and working populations are decreasing
  • 6. 2People can see change coming
  • 7. Widespread pessimism about retirement 48% female and 40% male are very/somewhat pessimistic Total 15% 29% 24% 6% USA 13% 21% 31% 12% Sweden 6% 24% 33% 6% United Kingdom 12% 27% 29% 7% The Netherlands 9% 30% 24% 5% Germany 19% 23% 25% 8% Spain 12% 33% 23% 5% France 16% 37% 14% 2% Hungary 31% 24% 14% 4% Poland 20% 46% 20% 3% Somewhat pessimistic Very pessimistic Somewhat optimistic Very optimistic Q. How confident are you that you will be able to fully retire with a lifestyle you consider comfortable?Source: AEGON.
  • 8. 3But people are not yet ready for change
  • 9. Old habits die hard? Born in 1940 Born in 1970 Born in 2000 Pensions are Pensions have been Pensions are important. important and the uninteresting. Hopes Will learn from mistakes system is DB. Expects to retire in his late 60s of parents’ generation. to retire at 65 and live and live for a further Will have fewer expectations for a further 15 years. 20 years. about retirement age, but will live to at least 90 years. DB Complexity for the Individual DC pensions pensions
  • 10. Overall, women are less prepared forretirement Overall, women are less prepared for retirement Men Women High High 5% 9% Medium Low Low 33% 49% 62% Medium 42% Source: AEGON.
  • 11. Retirement ages not shifting despite pessimisticoutlook Little variation in expected26% of respondents envisage retirement age based onretiring at 65 gender, age, income or education 20 16 20 20 20 15 17 15 16 18 65 65 65 67 66 65 67 65 65 67 Total Germany France The United Poland Spain Hungary Sweden USA Netherlands Kingdom Full retirement Years in retirement Q14/Q15. At what age do you think it is most likely that you will enter full retirement?/ How many years do you expect to spend in full retirement? (all figures are medians)Source: AEGON.
  • 12. 4How can companies help?
  • 13. Corporate pensions are becoming moreimportant – State pensions cut back • Increasing pension age • Decreasing pension payments • Increasing pension contributions – Employees will look to employers for support • Education • Contributions • Appropriate investment opportunities
  • 14. ‘With DC pensions, I am concerned that employeesmay feel that they don’t have sufficient savings andwill look to the company to compensate them. Theissue is about delivering DC more intelligently. Thereis much more to be done.’“” Head of international benefits and compensation, major multinational interviewed for AEGON Global Pensions Pensions in Europe Survey
  • 15. Helping employees to help themselves Making a difference Have a plan, use it • Engage and motivate • Support employees • Provide appropriate investment solutions • Auto-enrol? • Auto-escalate? • Flexible retirement? 15
  • 16. Every plan is a DB plan… DB $$ $ $$ Retirement $ DC $$ $ $$ Retirement $
  • 17. Any Questions?Contact InformationDr Thurstan RobinsonAEGON Global Pensionsthurstan.robinson@aegon.comwww.aegonglobalpensions.com 17

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