Carey Helenius outlines a process he, and Switzerland-based colleague Jules Gribble, formulated to design ‘Successful and Resilient Lifetime Retirement Income Products’.
The process ranks retirement products against minimum standards from each key stakeholders’ (government, regulators, product providers, distributors and consumers) perspective, and allows for modification of the product design to satisfy the criteria of each of the stakeholders.
Using this process, Carey and Jules create a product that minimises the impost on the active retiree, but also secures a lifetime income and services at the later stages of retirement. The product retains elements of an allocated pension during the active phase, but includes regular annual contributions into a pooled vehicle to provide aged care and health services for the higher ages.
The population of over 80s stands at 1 million people and is growing at twice the average population growth rate. As retirees live longer and dementia rates rise, the delivery of not simply money, but of effective programs and trusted services to elderly retirees becomes more critical.
Carey argues that the range of retirement products that currently exist across the world are unsustainable and ignore the needs of retirees - particularly those in the elderly passive and frail phases of retirement.
The time is now, says Carey, to build sustainable products that cater for longevity risk.
IAA and Actuaries Institute collaboration
This video provides an overview of the International Actuarial Association's (IAA) and Actuaries Institute Paper Determination of Retirement and Eligibility Ages: Actuarial, Social and Economic Impacts which examines the actuarial, social and economic impacts of raising the eligibility age for retirement benefits and describes the experience of several countries in doing so. It discusses the resulting effects on individuals (both healthy and unhealthy), socio-economic subgroups, employer sponsored plans, social security programs, and the labour market. Access the paper here.