What are pension experts saying in 2022?

pioneering pensions podcast mic

What makes a good pension solution? How can we, as an industry, improve pension provision? How are other countries addressing the challenges that we face? What is top-of-mind for the thought leaders in our industry?   

We’re all aware of the importance of the transition to a more sustainability society. As a pension fund, we take Environmental, Social and Governance (ESG) concerns into account when we engage and invest in companies. A workplace pension itself is the big ‘S’ in ESG. It supports financial wellness at older age and helps to reduce old age poverty.

Managing members’ pension savings is a social responsibility. Many components must work together to reinforce a strong system – pension policy, organisational design, pension administration, investments strategies to member choice and user experience. The industry is continuously learning and improving, but there’s always room to do more, and we can learn a lot from other countries and international experts.

So with an objective to learn and spread knowledge, we started a Pioneering Pensions conversation series between pension thought leaders, policy makers and bright minds around the world who are pioneers in pension, with the rest of the industry and anyone who wants to learn. Like most good things that in life, knowledge is best when shared.

To wrap up the year, we’re sharing a playlist and summary of these conversations. Hopefully you will find one or more conversation that matches your interest.

On designing a pensions system for good

Richard Thaler’s nudge theory has been the catalyst for the auto enrolment policy reform. In this conversation, Richard unpacks what choices, if any, pension schemes should offer, how we encourage people to make good decisions, and what the next big nudge (after auto enrolment) might be.

Watch now: ‘A nudge towards a better pension’ with Richard Thaler, Nobel Laureate, behavioural economist and author

Steve Webb, former UK minister of pensions reflects on 10 years of auto-enrolment in the UK that has seen over 10 million people auto-enrolled into a workplace pension. We ask him what he would do differently, and what policy changes could address current challenges in the pension system.

Watch now: ‘From pension policy to practice’ with Steve Webb, Partner at Lane Clark & Peacock and former UK Pensions Minster

What types of choices should be offered in pension systems? When it comes to choice design, do we focus on how we think people should act, or should the focus be on how they do act? Nick Barr shares lessons learned from other countries. 

Watch now: ‘Lessons from pension systems around the world’ with Nick Barr, Professor of Public Economics, London School of Economics

Retirement in the future will look very different from the past, which means we need to think differently about spending patterns. In the US, they struggle with the same problems as here in the UK. David John talks about the US approach to emergency savings, small pot consolidation and transforming savings into income.

Watch now: ‘What the UK can learn from the US retirement system’ with David John, Senior Policy Advisor, AARP Policy Institute

On retirement planning and choices in retirement

Many of us envision a prosperous, long life in retirement, but rarely think about how we’ll sustain it. The risk – as Larry Kotlikoff puts it, ‘is not dying; the risk is living to 100’. Our society as a whole is at risk of outliving our savings. So, what could pension schemes do to help people get the most from their savings? How financially stable are public pension systems?

Watch now: ‘Live long and prosper? How ageing and inequality affect pensions’ with Larry Kotlikoff, Professor of Economics, Boston University

Life-cycle finance theory is the foundation of most defined contribution investment strategies. Zvi Bodie argues that strategies would do well by matching assets to income goals. He challenges the popular assumption of time diversification – that stocks are less risky in the longer-term.

Watch now: ‘The theory of life-cycling saving and investing’ with Zvi Bodie, Professor Emeritus, Boston University 

Is retirement overly complicated for people to understand, and is it the industry that has made it this way? What could an understandable and intuitive self-managed pension drawdown look like? Don shares his view on how to achieve that.   

Watch now: ‘Managing your income after retirement’ with Don Ezra, Finance commentator, Financial Times

On creating a lifelong income in retirement

If we had a crystal ball, we’d know how long we’d live and how much retirement income to take. But that’s not the case. Richard Fullmer talks about longevity risk pooling in a pension scheme, and how it can guarantee a lifelong income for members. Once they pass, the funds are redistributed and paid to surviving members, and the cycle continues. How does this work, and can it be applied to master trusts?

Watch now: ‘What is longevity pooling and how does it work?’ with Richard Fullmer, CEO of Nuovalo Ltd

Brnic van Wyk has developed a lifelong retirement product for Australian Retirement Trust (QSuper). The solution has pushed the boundaries of creating a lifelong retirement income by pooling individual longevity risk within an Australian Superannuation fund. Brnic van Wyk shares his lessons from developing this product.

Watch now: ‘The QSuper retirement solution ’ with Brnic van Wyk, Head of Asset/Liability Management, QSuper, Australia

Retirement is different now compared to generations past. Spending and life patterns have changed, and life expectancy has increased. What can historical trends tell us about our futures in retirement? Bonnie-Jeanne MacDonald shares her views, and why the concept of ‘dynamic pensions’ may be the way forward for offering lifelong retirement income.

Watch now: ‘Retirement – it’s not what it used to be’ with Bonnie-Jeanne MacDonald, Director of financial security research, National Institute on Ageing, Toronto Metropolitan University

On financial education and wellbeing

Does financial literacy result in better outcomes? Annamaria Lusardi thinks so. The more knowledge and skill people have to make important financial decisions, the better their financial wellbeing. What can be done to improve financial literacy, especially for underpensioned groups who need it most?

Watch now: ‘The impact of financial literacy on financial wellness’ with Annamaria Lusardi, Professor of Economics and Accountancy at George Washington University School of Business

What is member engagement, and how much member engagement is good? With the cost-of-living crisis, the importance of having some emergency savings has been made painfully clear. Will shares his learnings from implementing the ‘sidecar pilot’ and the latest design tweaks to increase take-up.

Watch now: ‘Approaching pensions from a behavioural perspective’ with Will Sandbrook, Executive Director, NEST Insights

On investments and sustainability

Long-term investors such as pension companies must adapt in the wake of climate change and the transition to a more sustainable world. Keith Ambachtsheer shares his views on how organisations and investment strategies alike should account for the long-term implications of climate change, and the best way to communicate this.

Watch now: ‘How can investors adapt to climate change?’ with Keith Ambachtsheer, thought leader in pension design, governance and investing

Meanwhile on an international level, we explore countries leading the way for socially and environmentally impactful pension systems. Fiona Stewart, from the World Bank, shares good examples from emerging markets.  

Watch now: ‘How are climate and biodiversity investments developing?’ with Fiona Stewart, Global Lead, Insurance and Pensions, World Bank Group

For the upcoming conversations on Pioneering Pensions, please visit pioneeringpensions.com