Global retirement systems play a critical role in society and impact virtually every major stakeholder group, as well as the broader economy and financial system. Historically, public and private institutions had managed and pooled the risks of individuals and guaranteed certain outcomes to individual participants, but that system has slowly been supplanted by one where each individual is personally responsible for their retirement and long-term financial well-being.
Corporate pensions, public pensions and individual savings are all underfunded. The key to financial security requires coordination among public, private and individual stakeholders.
As a global consulting leader in advancing health, wealth and careers of individuals, Mercer has been tracking the trends behind the global pensions shortfall. Our financial security consultants have been advising our clients on how they can best prepare their people for an uncertain future and improve their overall financial stability.
In this breakfast session, we highlighted key aspects of Mercer’s latest research around financial security in retirement, and explained what these evolving trends mean for the future of retirement. We discussed what stakeholders can do to drive change from the individual level to the corporate level to the government level. Areas of focus included:
"Pension systems around the world, whether they are social security systems or private sector arrangements, are now under more pressure than ever before. Declining birth rates and increasing longevity have put financial security in retirement at risk".
"Falling rates, low returns and longer lifespans are eroding funded status for Defined Benefit plans. The Mercer Pension Buyout Index tracks the relationship between the pension obligation held for its retirees in its financial statements and the cost of transferring such obligation to a third party (that is, an insurer)."