Retirement Risk Metrics

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  • Beyond Market Volatility: Model Risk in Retirement Planning

    During the decumulation phase of the retirement savings lifecycle, an individual’s goals are defined as a series of withdrawals. However, many of the existing Monte-Carlo models used in advisory and financial planning software tools have been designed primarily to support only the wealth accumulation phase. These models may be failing to capture key risk factors facing investors during the withdrawal phase. The following case study illustrates the potential impact of this gap, in terms of both unreliable risk assessment and unsuitable investment advice.

  • Retirement Revolution in the UK

    For the UK life insurance industry, the impact of the U.K’s Chancellor of the Exchequer’s budget statement, “Freedom and Choice in Pensions” has been immediate and real. In this paper Phil Mowbray looks at what this means for pensioners and the advice professionals that represent them.

  • A needs-based approach to pension and retirement planning

    In an environment of continued low yields, pressure on defined-benefit pension schemes to manage liabilities, and the introduction of auto-enrolment, advisors face complex pension investment decisions which can have a direct and dramatic impact on a client’s pension benefits. However, by using financial modelling tools, advisors can enable firms to deliver pension advice which is objectively matched to client needs. Philip Mowbray explains how.

  • Pension de-risking roadmap: a slippery path?

    Pension fund de-risking through switching strategies doesn’t necessarily guarantee the locking in of benefits or reduction of risk. Celene Lee assesses how the different approaches stack up.

  • A new toolbox for retirement planning: risk management solutions

    Part two of a two-part series. While retirement investors are facing sustained low yields and an uncertain economic environment, the range of risk management solutions is failing to evolve to meet the challenge. Phil Mowbray looks at some new risk management solutions which would enable investors and advisors to build more sustainable retirement income plans.

  • A new toolbox for retirement planning: risk measurement - an essential tool for retirement income planning

    Part one of a two-part series.  Phil Mowbray develops a set of metrics which can be embedded within the advice process to allow retirement customers to quantify these risks and identify the most suitable retirement options.

  • Building a sustainable retirement plan

    Do you have a robust risk management framework in place? Can you combine the available options to achieve the best outcomes for your customers?

  • How sustainable is your retirement?

    This case study utilises a Retirement Planning Dashboard to highlight the key trade-offs in the planning process: income bequest and sustainability.

  • Building risk management into the governance framework for your DC scheme

    The widespread growth of Defined Contribution (DC) as the core retirement savings vehicle for individuals has created many governance and regulatory challenges for employers, fiduciaries and advisors. Not least of which is to help DC members achieve required retirement outcomes in the face of increasing exposure to the risks of longevity, inflation, and volatile markets.

  • Governance for DC pension default funds

    Investors, advisers and fiduciaries can use Retirement Risk Metrics as a governance ‘dashboard’ for evaluating and communicating risk across a variety of Default strategies. This report provides an outline example of these metrics, applied to the asset allocation glide-paths associated with some sample default strategies.

  • Combining investment and insurance… managing the retirement risk paradox

    Solutions for meeting the challenge of managing retirement risk -- generating enough income to maintain an acceptable lifestyle in retirement without increasing one’s exposure to the risks of longevity and inflation -- are examined in this report, which looks at the case of a 60 year old approaching retirement

  • Retirement risk metrics for evaluating target date funds: a scenario modelling framework

    We present a stochastic modelling framework which can be used to evaluate the key risks in different Target Date funds. This risk framework is applied to a range of the largest US Target Date funds, to illustrate how investors can better understand the different risks in Target Date funds and make more informed decisions as to which fund best suits their own risk profile and financial planning needs.

  • Investment strategy design for defined contribution pension plans

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