Retirement 20/20 Key Facts

Led by the Society of Actuaries Pension Section Council, Retirement 20/20 is an initiative that brings together key stakeholders with an interest in developing new retirement systems. The first meeting in September 2006 leveraged the insights of more than 60 experts, including leading pension and retirement actuaries, corporate benefits managers, attorneys, public policy advocates and academics.

The Retirement 20/20 initiative began in reaction to the decline in defined benefit plans and the purpose of the initiative is to design new systems from the ground up. With the U.S. population reaching over 300 million and the expected retirement of 78 million baby boomers in the next 20 years, the current retirement system offers only two options–defined benefit plans and defined contribution plans. A system with only two options is not sustainable and does not sufficiently meet the needs of employers, society or individuals. Fewer companies are able to offer the 50- or 80-year commitment that a defined benefit plan requires, and most people do not have the skills to manage their savings in a defined contribution plan.

Building the Foundations for New Retirement Systems, the report from the first conference of the SOA's Retirement 20/20 initiative, examines retirement systems models against the needs, risks and roles of all stakeholders contributing to or benefiting from the current systems. Retirement 20/20 participants developed six major themes they say will need to be addressed in designing new retirement systems:

• Systems should consider new norms for work and retirement and the role of the normative retirement age.
• Systems should align stakeholders' roles with their skills.
• Systems should be designed to self–adjust.
• Systems should be better aligned with financial markets.
• Systems should clarify the role of the employer
• Retirement systems will not succeed without improvements in the health and long–term care systems.

The next step of the Retirement 20/20 initiative is to develop additional research reports on self–adjusting systems, stakeholder roles and risk pooling. The first of these reports, on self–adjusting systems, will be available later this year. The Retirement 20/20 participants will sponsor another conference in fall 2007 to focus on how best to align stakeholders' roles with their skills.

For a copy of the summary and full report Building the Foundations for New Retirement Systems please contact Kim McKeown at 847.706.3528, or visit Retirement2020.soa.org.

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About Society of Actuaries

The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public and its members. The SOA's vision is for actuaries to be recognized as the leading professionals in the modeling and management of financial risk and contingent events. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems involving uncertain future events.