Rob Rusconi, Independent actuarial consultant presented at the 10X Retirement Conference 2014 on the topic Helping members take responsibility for their retirement: lessons from abroad

1. Helping members take
responsibility for their
retirement
Lessons from abroad
Rob Rusconi, Tres Consulting

2. What this address is not
Top tips for retirement saving

3. What this address is not
Top tips for retirement saving, or
a summary of everybody else’s smart thinking

4. What this address is not
Top tips for retirement saving, or
a summary of everybody else’s thinking
Because:
- we’re not economic units

5. What this address is not
Top tips for retirement saving, or
a summary of everybody else’s thinking
Because:
- we’re not economic units,
- our lives and paths are unique

6. What this address is not
Top tips for retirement saving, or
a summary of everybody else’s thinking
Because:
- we’re not economic units
- our lives and paths are unique, and
- we only have once chance

7. At the heart of the problem
We might wonder whether anybody really cares any more
- DC members bear the risk
- Employer no longer funder of last resort
- Power lies in theory with the trustee, but in practice with the financial services industry
- And advice from the industry is not entirely trustworthy

8. At the heart of the problem
We might wonder whether anybody really cares any more
- DC members bear the risk
- Employer no longer funder of last resort
- Power lies in theory with the trustee, but in practice with the financial services industry
- And advice from the industry is not entirely trustworthy
Few financial advisers have the right incentives to care
- seldom remunerated on quality of advice
- seldom there to help when things go wrong

9. The Big Retirement Risk
Running out of Money Before you Run out of Time
Erin Botsford, publ. Greenleaf

10. The Big Retirement Risk
Running out of Money Before you Run out of Time
Erin Botsford, publ. Greenleaf
Good core message
- Take control of your retirement planning
- Plan ahead with the goal in mind
- Take care accepting the wisdom of experts
- Invest assets in retirement for income
Great advice on distinguishing needs from wants and hopes
Good explanation of the characteristics of asset classes

11. The Big Retirement Risk
Running out of Money Before you Run out of Time
Erin Botsford, publ. Greenleaf
Pessimistic on equities
- Yes, equity returns are volatile
- Yes, entry and exit timing can be lucky
- But, no, shares are not just a risky asset
- Not even an asset whose return rewards the risk taken
Shares are a good match for your pension liabilities
Though you must take care of the volatility of share values

12. A Pension Promise to Oneself
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13

13. A Pension Promise to Oneself
Another good core message: take responsibility
- Consider your DC savings the way an actuary would a DB fund
- Work out your liabilities and discount them
- Accumulate assets on the basis of an economically sound plan
- De-cumulate in old age to preserve the value of longevity pooling
Be prepared to make personal fiscal adjustments
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13

14. A Pension Promise to Oneself
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13

15. A Pension Promise to Oneself
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13

16. A Pension Promise to Oneself
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13

17. A Pension Promise to Oneself
Stephen Sexauer & Laurence Siegel
Financial Analysts Journal vol 69 no 6 p 13
Main criticisms
- Sophistication beyond the reach of most
- Need for external information on retirement rates
- Assumptions probably unduly conservative
Personal fiscal adjustment unlikely in practice

18. Takeaways: for members
Take personal responsibility
Learn along the way
Careful with your trust
Live for tomorrow
Do not overestimate competence

19. Takeaways: for members
Take personal responsibility
Learn along the way
Careful with your trust
Live for tomorrow
Do not overestimate competence

20. Takeaways: for trustees
Take personal responsibility
Learn along the way
Careful with your trust

21. Takeaways: for trustees
Take personal responsibility
Learn along the way
Careful with your trust
Live for tomorrow
Do not overestimate competence

22. Thank you