Download - Retirement Readiness with Thurstan Robinson
Retirement readiness Retirement readiness –– preparing for the preparing for the future of pensionsfuture of pensions
Thurstan Robinson
1
The world is changing
Ageing populations are rising globally…
Average Life Expectancy (in years)
And the trend does not seem to be slowing
More than you may think…
True life expectancy (with future improvement) if past 10 years are indicative
Current 2050
Low Expected High Low Expected High
NL 84.7 / 86.6 92.2 / 93.7 123.3 / 127.0 88.3 / 90.0 95.2 / 96.4 157.3 / 161.5
UK 85.8 / 87.8 94.4 / 95.6 126.9 / 128.4 89.2 / 91.2 98.6 / 99.6 166.6 / 168.1
US 76.6 / 82.6 90.7 / 94.1 115.8 / 131.7 74.2 / 82.6 95.4 / 98.7 147.4 / 183.5
How long are we going to live?
……and working populations are decreasing
2 People can see change coming
Widespread pessimism about retirement
Q. How confident are you that you will be able to fully retire with a lifestyle you
consider comfortable? Source: AEGON.
46%
24%
37%
33%
23%
30%
27%
24%
21%
29%
20%
31%
16%
12%
19%
9%
12%
6%
13%
15%
20%
14%
14%
23%
25%
24%
29%
33%
31%
24%
3%
4%
2%
5%
8%
5%
7%
6%
12%
6%
Poland
Hungary
France
Spain
Germany
The Netherlands
United Kingdom
Sweden
USA
Total
Somewhat pessimistic Very pessimistic Somewhat optimistic Very optimistic
48% female and 40% male are
very/somewhat pessimistic
3 But people are not yet ready for change
Born in 1940
Pensions are
important and the
system is DB. Expects
to retire at 65 and live
for a further 15 years.
Born in 1970
Pensions have been
uninteresting. Hopes
to retire in his late 60s
and live for a further
20 years.
Born in 2000
Pensions are important.
Will learn from mistakes
of parents’ generation.
Will have fewer expectations
about retirement age, but
will live to at least 90 years.
Old habits die hard?
DB
pensions
DC
pensions Complexity for the Individual
Overall, women are less prepared for retirement
Source: AEGON.
Low 62%
Medium 33%
High 5%
Women Men
Overall, women are less prepared for retirement
Low 49%
Medium 42%
High 9%
Retirement ages not shifting despite pessimistic outlook
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)
65 65 65 67 66 65 67 65 65 67
20 15 17 15 16 18 16 20 20
20
Total Germany France The Netherlands
United Kingdom
Poland Spain Hungary Sweden USA
Full retirement Years in retirement
26% of respondents envisage
retiring at 65
Little variation in expected
retirement age based on
gender, age, income or
education
Source: AEGON.
4 How can companies help?
Corporate pensions are becoming more important
– 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
‘With DC pensions, I am concerned that employees
may feel that they don’t have sufficient savings and
will look to the company to compensate them. The
issue is about delivering DC more intelligently. There
is much more to be done.’
“ ” Head of international benefits and compensation, major multinational
interviewed for AEGON Global Pensions Pensions in Europe Survey
Making a difference Have a plan, use it
• Engage and motivate
• Support employees
• Provide appropriate investment solutions
• Auto-enrol?
• Auto-escalate?
• Flexible retirement?
15
Helping employees to help themselves
Every plan is a DB plan…
DB Retirement
DC Retirement
$$
$ $$
$
$$
$ $$
$
17
Any Questions?
Contact Information Dr Thurstan Robinson AEGON Global Pensions [email protected] www.aegonglobalpensions.com