Saturday, March 30, 2013

Geneva Association's Pension Proposals

Participants at Geneva Association Conference Strongly Endorse the Four Pillars Concept 

by Krzysztof Ostaszewski+

Global Action on Aging urges you to consider some responses from p
articipants at the December 2012 Geneva Association conference on the Four Pillar System.  Recipients received a short questionnaire asking their views on some key issues concerning the current and future situation of global retirement systems. Here are some questions and answers that will interest you.

A.  Are there any challenges to global retirement systems that are still going unnoticed?
B. Where will the solutions to the global retirement crisis come from?

C.  What are necessary changes in the workplace to make employment of silver (older)  workers effective, productive and beneficial to both employers and employees?
D. If you were to give advice to political decision-makers, insurance firms, pension plans and individuals (current and future retirees) in order to address the global retirement systems' challenges, what would you advise each to these groups?
In response to Question A, the participants chose “global ageing and increasing longevity” as the top challenge but a close second was "public finance and financial repression."
Other concerns listed were "low interest rates and low economic growth," "increasingly intrusive and productive regulation," "individual myopia," and "decreased willingness to engage in solidarity systems."
In response to Question B, the top choice was “breakup of the European Union or other significant political dislocation,” with “liability issues” as a close second; “insufficient disclosure of information to citizens” was also mentioned.

The clear winner among the answers to Question C was: “continued employment of the elderly and a flexible labour market,” i.e. the fourth pillar, as proposed by The Geneva Association and its Life and Pensions programme.  . . . . . "

We hope that political decision-makers will hear this message. Participants also, though far less strongly, endorsed financial innovation from insurance firms and private pensions, as well as programmes created by governments, as possible solutions to the retirement challenge.
In response to Question D, again, the winner was very clear: “tax and regulatory incentives to employers for the employment of silver workers.” The second most common answer was: “removal of regulatory and tax barriers to employment of silver workers,” another endorsement of the role of the fourth pillar. 

Here are some examples of advice given in response to Question D:
Carefully balance concerns about financial sustainability and adequacy of benefits;
More transparency, financial education, and information about the value of benefits and cost of retirement;
Proper ethical standards for financial advisers; A new social contract;
Honesty in communicating the nature of the problem to citizens; address the long-term care problem;
Careful monitoring of longevity improvement by insurance firms;
Political decision-makers should show more flexibility, and pay attention to financial sustainability; 
Pay attention to health issues, as not all workers can work more and more years; Raise retirement age, but also protect low-income workers;
Governments should help grow the second, third and fourth pillars;
Pension plans should work on effective risk-sharing.

If you are interested in more information, contact the Research Director, Life and Pensions, The Geneva Association.

Susanne Paul, Global Action on Aging.




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