Retirement a process, not a date

The logical and safest response to a shifting retirement landscape is to remain in the market while ensuring that your pre- and post-retirement strategy is aligned. Historically, fund trustees, members and the retirement fund industry have planned for a defined event called retirement.  But for a while now “we have been asking whether the member is best served by this line in the sand approach” says Linda Sherlock, Head of Advisory – Retail, Alexander Forbes Financial Services.

Read more: Shifting Retirement

Financial crisis has left scars on private and public pension systems

In certain cases, the reserves of pension funds have dropped to between 60% and 100% of national output. That, by way of comparison, is the ratio of the national debt to output in some advanced countries. The greatest shortfall noted was of about 45% in Japan, followed by about 35% in Sweden. Brazilian and South African companies were the only ones in overall surplus on this score, according to a recent report by the Organisation for Economic Co-operation and Development (OECD).

Read more: South Africa and Brazil only countries in positive territory

Pensions in trouble globally

The present global financial crisis has seen assets in private pension plans – which have become an important component of diversified retirement systems in member countries of the Organisation for Economic Co-ordination and Development (OECD) – fall by nearly 23%, or around US$5.4 trillion, between the end of 2007 and December 2008. They have likely fallen further since then, according to an OECD report on reform- and exit strategies for government interventions.

Read more: Pension Crisis