The $500 trillion prize

A customer-centric vision for the global pension and retirement market

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Managing demographic transformation, particularly regarding pension and retirement systems, is a pressing challenge in the global economy. Whether examining how best to develop defined benefit or defined contribution-based systems to ensure financial well-being in retirement or safeguarding public sector financial solvency, there is no easy solution.

Most attempts at reform have sought to bring together various stakeholders across the board — employees, employers, government agencies and retirees — in an effort to enhance investor education, product selection, efficiency and governance. The goal is clear: implementation of a sustainable system to optimize financial well-being in retirement.

We have intentionally chosen a provocative title for this global pension and retirement market survey, projecting that the total pool of retirement assets will approach $500 trillion over the next decade. Achieving that daunting yet essential goal will be an enormous challenge that demands close partnership among all stakeholders.

Key findings from the survey


Vision, strategy and role clarity are the foundation for public confidence.

Pension, retirement and social security policies and solutions evolve and mature. The discipline to clearly define and articulate a long-term vision is critical.

Using country or provider peers as the sole reference point supports only a short-term answer that is often politically influenced. The common fiduciary responsibility to “act in members’ interest” drives many policymakers to look globally and to other industry sectors for guidance.

Private sector providers play a vital role in delivering the strategy, as well as social, pension and retirement policies. Their business strategies must balance maximizing short-term results with the more important long-term goal of successfully optimizing shareholder and member value.

All stakeholders must align and agree upon a long-term strategic policy to restore confidence in the system.


Incentives shape decision-making.

An effective incentive policy affects stakeholders in several ways. For members, tax incentives may drive participation, but not help members make informed choices.

For employers, the role of information and contribution processing agents must change. Employer incentives must more effectively leverage employers’ trusted role as advisors to engage members in a more effective manner.

For public and private sector funds and their product and service providers, all stakeholders need to proactively develop an effective incentive, remuneration and reward framework that encourages sustainability. Reasonable surpluses are essential for all providers to adequately maintain and evolve their infrastructure and capabilities.

Finally, for governance bodies, policymakers and regulators, sustainability, efficiency and effectiveness are crucial. However, the behavioral and financial changes needed to achieve these objectives will take time to implement.


Empowering informed decisions creates distribution action.

Most policymakers recognize the importance of decision-making. Auto-enrollment and pre-determined choices are established solutions. Opt-out solutions, based on member inertia assumptions, are rapidly growing in popularity. However for some members, those assumptions are incorrect.

Leading countries are fast embracing the need to fill this enablement and empowerment gap. The converging solutions for pension, retirement and wealth management in several countries are excellent starting points to understand how to empower informed decisions. Recent analytics-based robo-advice solutions are examples of a path forward.

Much can be learned from the travel, hospitality and life insurance industries. Imagine an independent and trusted retirement advisor platform where members and employers can rate their experiences, search, inform, track and transact.


Pensions were yesterday. Today, the product must ultimately deliver well-being.

Most providers believe they provide exceptional customer service, but only a few customers agree. Many participants may have overestimated their maturity in a world of rapid changes to retirement solutions, fast-growing de-risking, and low confidence and take-up rates.

More than 50% of most stakeholder groups acknowledge the need to significantly change current pension and retirement solutions and substantially improve their relevance. Political debates that jeopardize reforms and legacy regulation are common barriers.

Unfortunately, this broad support to evolve does not align with current reform debate where the dominance of legacy paternalism displays its power.


Consumer protection and fiduciary oversight enable confidence

Participants in our survey raised three key issues:

Adaptation and evolution
As pension and retirement systems evolve, initially incomplete, unclear or inflexible strategies, principles and regulation are frequently later backfilled (inconsistently) with prescriptive compliance rules. New solutions are based on open architectures and have the elements of mature systems, complemented by an evolutionary process of review and governance.

Fiduciary changes
Most systems have outgrown the nascent stage, where an implicitly well-intended fiduciary was adequate. Leading governments, providers and employers aim for the highest standards of governance along the entire value chain. The long-term benefits for all stakeholders far outweigh managing initial costs and conflicts.

Transition from policing and compliance to protection and prevention
Leading governments, providers and employers learn from other industries or other parts of their business to focus on protection of their brand, customers and business. Strategic guidance is being led by risk, conduct and culture.


Shareholder experience and being “easy to deal with” influence distribution success.

Most participants globally confirm substantial gaps in being easy to deal with. The poor experience of beneficiaries, members and employers jeopardizes reform approval, engagement and choice take-up rates. Countries with higher choice exposure are generally more aware of the issues as stakeholders tend to make decisions by walking away.

Surprisingly, more than 50% of governments, policymakers and regulators acknowledge the need for fundamental improvements. Poor data quality and substantially increased costs to serve for employers, plans and providers are also affecting current perspectives and behavior.


Digital can support informed decisions, choices and transactions.

The digital agenda is reshaping the pension and retirement industry across public and private sectors – albeit slowly. Our survey found that overall digital maturity is low, which is likely to significantly impact confidence, experience, cost to serve and overall take-up in an otherwise rapidly digitizing world.

Corporate employers and product providers generally apply more challenging benchmarks, but few leading governments and policymakers challenge themselves in a digital context.

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