 and good evening and thank you for joining us today. My name is Andre Bellew. I work on the financial services team here at the World Economic Forum and I'd like to welcome everyone to today's discussion on redesigning retirement in the 100 year life. Today's session will focus on the important issue of retirement and specifically how we redesign retirement to make it sustainable and equitable for the 100 year life. Arguably the pace of thinking about how we redesign retirement is not keeping pace with the profound demographic shifts that have been underway for a while. And what we discovered over the years is that retirement is no longer just about your finances. It's about a holistic way of looking at your work, your health, the skills and your community. Fortunately, we have a wonderful panel assembled today to talk through many of these core issues that are redesigning retirement and the specific actions and the specific ideas that we need to promote and advance in order to redesign retirement for this new life. I'm very honored to be able to introduce today's moderator for the discussion, Martin Ferron. Martin is the president and CEO of Mercer, a global leader in redefining the world of work, reshaping retirement and investment outcomes. She's also vice chair of Marsh McClennan which is the parent of Mercer and one of the leading global professional services firms. And as importantly, if not more importantly for this discussion by trade, Martin is also a pension actuary and has been focused on retirement for much of her career. So we're very happy to have her here as well as the distinguished panel. And again, we're very happy to have you here with us to discuss these important issues today. So thank you for coming and Martin, let me turn it over to you. Well, thank you very much, Andre and it's my pleasure to be here with you all. And you're right, I've been actually obsessed with the retirement gap and being a pension actuary. At first I was focused on the financial gap but only you said it well, it's a question of mindset. And I will start by, well, thank you thanking you for being here today with us. I really look forward to the conversation and the thoughts and your questions. But are you reimagining your work life? Are you thinking about this proverbial 65 and the statistics of telling us that we will be living at least 20 years more than our grandparents on average? How is that changing your mindset? So I think sometimes by internalizing the question we start getting answers. And as Andre just said, it's more than what it used to be the financial question, will you have enough money to sustain your extended life? We all want to live healthier as well longer, not only live longer. And therefore, are you going to take care of your health? Are you going to stay productive and sustain employment whether you either need it or want it in the longer part in the later part of the life? So for us, there's a role to play whether you're an individual, whether you're a human resource practitioner, whether you're a CEO, corporate or government and policy makers. I think we all need to look at that very important aspect. Actually, the age 65 plus is the fastest growing segment of population these days. It's going faster, that's that group than any other group. So it's not upon us, it's with us today. We need to think about actually new employment models, flexible work arrangement, partial phase, the retirement programs, but also sustaining our skills, upskilling, reskilling, something that we've been talking quite a lot about and is absolutely spot on within the sustainable development goals that we have here for healthier human on this healthier planet over time. So I'm very pleased to have a great panel of expert with me today to debate that question. Think about the challenges also and the unintended consequences of that shift in mindset and needs. So first, I want to introduce Andrew J. Scott. Andrew is a professor of economics at the London Business School, as previously held positions at Oxford University at the London School of Economics and at Harvard University. Talk about a rich CV, Andrew, very impressive. Also been the author of two books, The Hundred-Year Life. So topical is that a new long life and your work focuses on the economics of longevity. So welcome. We also have Don Kenak. So Don, I appreciate you're joining us from in your time zone out there in Hong Kong. You've been living and working in Asia for over 30 years, I understand. Don is the chairman of Prudential Insurance Growth Markets and also the chairman of Prudence Foundation, the Community Engagement Arm of Prudential in Africa and Asia. We're also having Nanette Ekler-Faidel. Welcome, Nanette, as well. Nanette is a chief investment officer of the International Wealth Management Unit and also global head of economics and research at Credit Suisse. And Nanette has been with Credit Suisse since 1999, firmly heading the Swiss fixed income and credit research. So welcome to you all. Let's dive in and earn us on this very important question. And I'd like to get some early thoughts from you, Andrew, first, please. Thank you very much, Martine. And it's a privilege to be here with you all. I'm looking forward to our discussion. And it's great to call this about how we get pensions to be sustainable. It's a great word, sustainable, because of course what it means is we can't carry on doing what we're currently doing. And if the current system is unsustainable because of demographic shifts, longevity and low interest rates, we know things have to change. The only question, therefore, is how and when? So what I'm trying to sort of bring across from my view of this, which is I think there are two things happening. And the one that gets most of the attention is an aging society, a change in the demographic structure of society. More people aged over 65, more people aged over 80. And that's driven by a falling birth rate and people living for longer. But it's about an imbalance or a shift in the balance in the population. What gets much less attention and what I think is really important to the heart of sustainability is what I call longevity, which is the fact that on average, people are living longer. And more and more of those gains, particularly in the high income countries, are now coming in at ages after 17. And that's the really key one, because aging society is about how many older people there are. It's about end of life. But longevity is about everyone and it's about doing things differently. And aging society is about the scale of the number of people. But longevity is about time. What it means is that whatever your age, you have more time ahead of you than at previous generations have had with your 20, 60, or 80. Which means you've got to invest more in your future. And of course, finances is part of that, but we know it's about much more than that. It's health, skills, purpose, friendships, motivation, relationship. But it's about that time. Everyone has to be more forward-looking. And of course, we measure age chronologically, so we measure how much time has passed, but we need to be looking prospective how much more time have we got to go. For instance, the average Brit has never been so old, but never had so many years left to live. And it's that forward-looking thing I want to focus on, because if you've got more future, you invested in it more, you had to change your behavior. And that's what we're seeing. And that changing behavior has to be motivated to exploit the malleability of age. As we're living longer lives, the most important thing is to age well. It's becoming a really dominant theme. And of course, what that malleability becomes changes in behavior. And that's what I want to say. If longevity is about time, we have to recognize that time is a social convention. We structure life to suit us. We created in the 20th century the weekend. We didn't used to have the weekend. We just used to work six days. We also created teenagers. We used to have children and adults, but not teenagers. And of course, we created pensioners because we created retirement. And as life lengthens, as we have more time, we're seeing people structure time differently. And this is the heart of how we make pension sustainability doing things differently. Now, in my 100-year-life book, my 2016 book, I talked about how the 20th century we created a three-stage life. And too much, I think, government policy is about trying to push retirement back so we can extend that second stage and create a financial solution to these longer lives. That's the way to get financial sustainability. But simply pushing back retirement is neither optimal nor sufficient. And it's not optimal because if, for instance, you think 100-year-life is plausible and it's certainly a possibility for young children being born today, you're probably going to have to work to Europe at 80. You're going to have a 60-year career. And a 60-year career structure, as we currently do, sounds pretty miserable. Your health's going to be deteriorating. Your skills are going to be deteriorating. I suspect you get bored and motivation, your relationships. And so we're going to change what we do. It's also not sufficient just to extend the retirement age to state pension age because how do you give people those skills? We already know employment starts to fall from 50 plus. And for me, one of the ways of making, at a macroeconomic level, the word sustainable, is to make sure we don't see that drop off and from employment from 50 plus. If you think about this as about time, this longer life, then what you can see in the 20th century was the gains-to-life expectancy gave us time after retirement. It gave us this ever-longer retirement. Because I think we're shifting from a three-stage life to a multi-stage life where your careers are going to have different shifts and transitions, with retraining in between, gaps in between, sometimes full-time, sometimes working part-time, in the 21st century, these life-expectancy gains are going to be more about leisure, this side of retirement. We'll be pushing retirement out to later years, but changing how we work beforehand. A rise of flexible working. Now, one thing that's for sure is that to make things sustainable with a longer life, we have to work for longer. The only way out of that is if wage growth is much faster than life-expectancy gains. Without wage growth growing faster than life-expectancy gains, there is no alternative to longer lives but to work for longer. Of course, that's already happened. In the 10 years before COVID, across the G7, 100% of employment growth can be explained by an increase in employment in those aged over 55. Change is already happening and that increase in employment at older ages is what I call a longevity dividend. Every previous increase in health at younger ages and at middle age led to a GDP boom. We've got to do the same if we're going to make sure that at a global level, longevity is financially sustainable. But of course, longer careers means supporting more productive skills and good health for longer. It means tackling ageism but also changing the nature of work. And that kind of links into retirement because if a three-stage life is beginning to disappear and a three-stage life absolutely created retirement and pensions, then the implications for retirement and pensions are obviously going to be pretty extreme. So what do we know? One, I think we've got to be careful how we use the work retirement. It sort of makes sense to us at an individual level but the notion at a social level, there is a single age where everyone at the same time comes to a hard stop just doesn't exist anymore. It's already gone as of course is the way people behave after retirement, including carrying on work. Secondly, as we said before, with a three-stage life, stage two was about transferring financial wealth to stage three. In a multi-stage life, your portfolio is much more extensive. I have to keep an eye on my wealth, my skills, particularly my health, my relationships, my sense of purpose. I'm investing in lots of different things. And just as the accumulation stage for all of those are going to run for longer because we've got more time ahead of us, the de-cumulation stage is going to be a little bit different. We're going to see much more complicated patterns. For instance, I may take some time out to retrain and increase my skills. So I'll be accumulating my skills but de-cumulating my wealth in my 50s or in my 60s. I may take time out to improve my health or to care for parents to improve my relationships. So we're going to see some pretty major shifts. We also, of course, need to make sure that we have a more flexible pattern of pensions. A three-stage life with everyone in lockstep and unison is a basic model that works. Different people will be making different choices. What we know about aging is it's characterized by significant diversity in terms of health and in terms of circumstances. I reliance upon chronological age to become less and less useful. We also know there are whole new risks around. We have longevity risk around. The 20th century created life insurance industry, 19th century. We saw that there was a need to make sure that if you died early or relatively, your family was financially taken care of. The big risk today is longevity risk about living your skills, your wealth, your health. And that comes down, I think, to the key thing. We're going to see a lot more integration of health and wealth in people's planning. The most valuable thing in a longer life, yes, you need to finance it, but it's to maintain your health so you can create the finances and then you can use the finances. So health is going to be paramount. It is a thing that people will be prepared to pay billions for. I have a recent paper in Nature Aging about this. And that's not about what I do when I'm old. It's about what I do way before then. So integrating health and wealth together, a new dealing with the risks of longevity, deferred income, annuity, tomteens, et cetera. I talked about how we also need to make sure we don't leave the labor market at 50. It's a major challenge right now. Inequality and health is a really, really big problem. And of course, I've been talking about getting people to work for longer in high-income countries, but we actually need to introduce pensions in low-income countries. In low-income countries, older people work for too long. I suspect in high-income countries, older people need to work for longer. But the introduction of a state pension is absolutely key. Let me just try and wrap up. I want to think about how we achieve sustainability by thinking about time. And longevity gives us more time. And how do we shift that time across our line? We have to find a way of using that time that is sustainable. It's about changing social behaviors. It's already happened. People are already behaving differently. And of course, that's what's needed if we're to achieve that longevity dividend, that living longer in better health is economically good and not just welfare good. But I'd just like to go to one issue, which is that I think we'll stop seeing this as a problem and seeing it more as an opportunity. The fact that on average, people are living longer and in better health tends to be a great thing. So how do we redesign our life to make the most of that? And of course, the finances supports the life rather than our life support performances. Thank you. Thank you. Thank you so much, Andrew. Lots of food for thought. And it's interesting and we'll come back to this in terms of the behaviors having already shifted. So we'll unpack that a bit more. Before then, I'd love to hear from Nanette and actually you, Andrew, left us a little bit on a point of a conversation around finance, which I think is just a segue in it to your work in life. Yes, indeed. I mean, a lot was already said about how we all think about retirement. I'd like just to add a couple of additional perspectives in terms of attitudes and behavior. It's very interesting when you contrast the expectations individuals have on their sources of income in old age. And you ask this question both in a number of emerging markets as opposed to developed markets where we have been in this three stage model of life for a long time and people got accustomed to that. There's stark differences. Individuals in emerging markets actually think of sources of income much better distributed across some retirement provision and income from work. While when you ask this question to individuals that are home to developed countries where there is a model that they're accustomed to, most of them continue to really overwhelmingly say their expectation is that their income comes from the retirement provision predominantly and work doesn't play such a role. In some sense, those rich countries which have well-funded and well-developed schemes actually see people back to Andrew's points, thinking of their life as not really a life where work has much role to play. They'd much rather do something else. It can be voluntary work that is not compensated for and a lot of people are actually socially engaged but it shows that there is also this great opportunity. When you think about a population that is aging worldwide and where in the future a lot of the old people of the future will actually be home to emerging markets because this is a place where aging is going to come for the next 20 and 30 years, the opportunity lies in the behavioral aspect in how people think about their future and if the attitudes are already ones where work is an integral part of old age and people expect their income to come both from work as well as from a retirement provision, this helps to set up the retirement system and pension scheme of the future. It helps also the acceptability of such a more balanced retirement and work system where absolutely this flexible model that Andrew described where you could very well envisage longer work but on a part-time basis with very different sorts of responsibility. I mean, what people are worried about when they are in certain areas of services for example is that as their career progresses is that they have to carry the type of load and responsibility for an eternity and while it is much more optimal to gradually change roles and perhaps take more coaching opportunities. So I do see increased opportunities from emerging markets and them being actually naturally closer to how things should be set up for the future in an age population. I see opportunities for people having actually much better work-life balance where careers are going to have very different stages but where also the flexible model is going to be able to distinguish and pay attention to very different situations. I mean, there are areas of work and sectors where absolutely a system like we know today a three-stage system will continue to make sense just because people will not physically be in a position to do the same work in the same sector. They may have to change sectors but at the same time there will be just much more graduation and it's a great opportunity. Most definitely, if we think about a 60-year career as Andrew has suggested, I think shift and changes will be required not only because the world of work changes so rapidly but also to keep the motivation and the interest going and as you say, the physical to the different type of skills that you need to deploy to do your work. But you pose a question around the emerging markets where maybe the three-stage of life has not been as anchored in the way for so many years and we've done here who has been very close to these markets for many years. So, Dawn, some comments from your friend. Thank you, Annette. Can you hear me? Yes. Okay, thank you. Well, there's been a lot said and a lot to agree with. I think we're starting off with what Andrew said, a number of things which really resonate well with I would say our region, my experience. I mean, I'm actually, I saw 65 some time ago so maybe I'm living proof of some of Andrew's and theory's there. You know, I think what we're really are talking about is something along the moral on abolishing retirement rather than just redesigning it. And I think fundamentally Andrew never went quite far saying that, but I think fundamentally that's where you're heading. You mentioned health and wealth, integration. If you were to pull a bunch of prudential people together today and ask them what their purpose is, it is exactly that which is to make health accessible to millions more people and to increase health and wealth among those people. So, and our organization, as Nanette just alluded, is now a very Asia and Africa focused organization. We're in 15 markets that respond from mature markets like Japan to emerging markets like Cambodia and Indonesia all across the Asian region and now eight markets in Africa. So we're seeing sort of the full dimension of this issue in terms of demographic change. Let me just, my opening remarks, let me just stick to sort of macro things. I'd like to come back at some point and really talk about my colleagues in Singapore who actually were inspired by Andrew's life to 100 year life scholarship. And I think Andrew, you worked with them, I think. They did research and they've actually now gone to the stage of abolishing the retirement age. And I'd like to talk to some of that later about some of the experiences they've had and how that's working, which is really exciting. But let's talk about Asia in a bigger sense how fast is Asia really aging? And it's really, it's extraordinary if we put it in a Western context. The US is still, if you think of a young country as say 10% of the population is over 65 and then an older country, mature country is 20% over 65, which I think is a standard definition. Some statisticians UN uses perhaps. The US actually is gonna take 62 years to go through that journey from being 10% to 20% over 65. The UK 75 years, both countries will reach that point later in this decade. Japan did it in 22 years, ending in 2005 and China will do it in 18 years. It's in roughly sort of early period of that changed right down to 16 to 234, to 2034. What people don't, I mean, that's a well-known story. Japan is aging, China's aging, one child policy driving that. But what people don't typically know is that Thailand is gonna make that journey in 18 years from 2012 to 2030 and Vietnam's gonna make it in 23 years. So roughly the same speed as Japan. So even though we think of growth markets and in fact, there's no question as the net, I mean, as Martin mentioned earlier the fastest growing market is the over 65 market. But we've typically thought of many of these Asian tigers or fast growing countries benefiting from a demographic dividend, but that's gonna change into a different kind of demographics much more quickly than what we witness in the West. Even the Philippines or Indonesia which are considered very young countries today are going to go through that change in about half the time of the UK. So we're talking 35, 37 years, okay? So what does that mean? A couple of issues here. One is when Japan reached the stage of being a mature old country back in 2005 the per capita income was $37,000. The per capita incomes of some of these Southeast Asian countries are much lower, three or four or $5,000, $7,000. So the possibility of getting old before getting rich or even getting to upper middle class status is high. And so there's a fundamental issue there. There's also an issue coming back to the integration of health and wealth around healthcare systems and around overall healthy longevity. I recently, I chair a European Business Association for ASEAN region and we put out a report where KPMG and Sanofi did a lot of research in this area of healthy longevity and the age that I see in that report is average age 61 of healthy longevity. And the idea that was put forth in that report is we ought to see healthcare systems and healthcare expenses more as investments than as expenses in terms of national effort. And so a 1% increase in that healthy longevity, 61 going up by 1% yields a 4% increase in GDP. So I think as we're talking about how fast these over 65 populations are gonna increase, in addition to dealing with the retirement income question, which is huge, I'll touch on a little bit more in that in a second, there really, it is critical and Andrew's focused on it, this issue of making sure that health, starting from the earliest stages, childhood nutrition, which then has a tremendous impact. And we know in a number of these markets in our emerging Asian region and in Africa, there are serious issues with early child development. So one of the areas that our foundation, Prudence Foundation focuses on is working in that area to try to help communities and families get information on early childhood healthcare, mental development, and immunization, and so forth, because those children are gonna be supporting the economic future, if you will, of that aging society that 10, 20, 30 years has been exist. So this investment in healthcare systems from the very beginning is something we don't typically talk about, but it's a huge part of solving this issue. One other thing I wanna mention, cause it comes back to maybe what Nanette was referring to in terms of flexible systems, and also how we can make accumulation work. One of the challenges in a number of the markets in the emerging world is that the capital markets are not developed. So that if your entire financial system is basically dependent on bank deposits, as opposed to the ability to have a bond market in the stock market that would allow a defined contribution type pension system to exist, or to allow individual accumulation through insurance or mutual funds, if you don't have a capital market that's developed, it's a chicken and egg problem. It's very hard to develop those pension systems. So there's a simultaneous need here to be thinking about developing both the pension system, but also putting the necessary, if you will, capital market infrastructure in place to just put it in perspective, if you look at Japan, Japan's financial assets, if you say, if you add pension plus insurance plus mutual funds is about almost 200% of GDP. Singapore's about 150%. Indonesia's only 10%. So the ability, the scale of the possibility to accumulate financial assets, even if you're desirous of building that quicker, there's a bottleneck here that's gonna require serious work on developing capital markets. I'll stop there, you can see though, where I'm relating to is this is partly an issue of redesigning lives, but it's also an issue of redesigning, if you will, bigger picture infrastructure in many countries that requires a whole of government effort. It's the labor ministry, it's the finance ministry, it's the tax authority, it's justice. It's a whole of government issue that sort of needs to come together to make progress across and in the health ministry, of course, across a wide front. Thanks, Don, thanks everybody, Nanette and Andrew. We have time for a little bit of exchange in questions. As you were all talking about change in behavior, change in system and some acceleration and flexibility, I was actually thinking of the impact of the pandemic in the global phenomenon. And Andrew, maybe to you for a minute, comment on whether you think that has helped move us along quicker or not and if technology that we've been and still using today in a much different way can play a role. Yeah, and we're all desperate for this terrible experience to yield some long run positives, aren't we? So wouldn't that be great? And I think clearly, I've said several times that COVID to me seems to have been both an accelerant and a stress test. It's accelerated number of trends like technology and how we work from home, but also as a stress test, it's revealed which countries and which people can cope with that. So we've seen, for instance, the people with resources and education and certain jobs can work from home, others can't. We've also seen hugely different impacts in terms of the mortality rate from COVID. Comparing UK and US with, say, Japan. Wow, that tells you that some countries are set up to look after older people and others aren't. So I think it's been incredibly revealing. When COVID first hit, way back in early 2020, I'm obviously a ghast as an economist of what's happening, you fear for humanity and your own family, but I also thought, wow, here in my focusing on healthy longevity in the midst of a pandemic, no one's gonna be interested in this anymore. And actually it turned out to be quite the contrary. And I think that's because COVID right at accelerated things, it revealed as the start at the beginning, this is the first pandemic, since we've had more people aged over 65 and under five. And given COVID mimics all cause mortality, that is when we've had to behave in a totally different way than if we had very few older people. It's also revealed to us, it's not that 70 isn't old, that there's still a lot more life to come. It's revealed that it's not just age, it's your underlying health that makes an enormous difference and co-morbidities in particular are a problem. But it also seems to me to reveal a really key truth, which is that both as individuals and as governments, we've taken steps which have created GDP in order to save lives and remain healthy. So it shows that the most valuable thing is health and we're prepared to spend an awful lot to look after it. And if we sort of superimpose that on with just how much more the older population is, wow, that's a multi-trillion target. We've got to make sure that we age well. And that's about preventive health or intervention. We've seen with COVID that there is no point treating older people with COVID when they're in hospital. You've got to stop them from getting ill. So it has in sort of just flashing lights, I think really reinforce things. And then I guess, you know, two other quick things I would say about COVID is that it's also revealed that health is far more than just physical. Mental health is really important. I think that's been a real progress. I think without taking mental health much more seriously. And then the ability to work flexibly. You know, I was talking about how we need to have different careers and flexible jobs, but also actually if we can combine caring and working, being working from home as well as going into the office, I think that's good. You think about how firms can influence our health. One is through their products, the other is through the working environment. I think that's created a potential for a real step forward. Absolutely, Andrew, and thanks for those. And coming to you in terms of Don who's saying the role of government in particular infrastructure and pensions, and you alluded to that as well, in particular in the emerging market. It's almost like you need symbiosis. You need the well-established three levels of three periods in life to learn from the emerging market. I think sometimes you need the emerging market to learn from this capital infrastructure pension systems to be implemented. But with the governments having gone deeply in debt through pandemic, having to sustain the current state, how do you reconcile that need that we have in sustaining the longer lives and supporting them? I think what has been made clear, whether it is because of the pandemic and how governments have actually reacted to it, especially taking on a lot of public debt in order to be supporting their populations to overcome this shock, is in some sense restraining how far government will be able to fund just in its entirety, retirement systems, whether this is in emerging markets or in developed markets where debt has yet reached another level. I mean, just think of Japan for a moment. There is more than 200% of GDP in terms of public debt that is issued at the moment, right? So what it is, I think the past that this is showing towards especially for emerging markets that have to put a retirement infrastructure in place in many cases, these are non-existent yet. And this is also one of the reasons where the attitude of individuals is that they have to sustain themselves and their livelihoods until very late in their life cycle. What it is pointing towards is a public and private collaboration. It's a public privately funded system where a very minimal basis is going to be potentially carried by government and there will be a push towards that, but it will have to be complemented by what individuals can do either through occupational pension schemes. In other words, during their life of professional activity and how they and their employers contribute to fund their own funded pension pillar, but also some individual voluntary contributions that people can make on top of that. And once you come to this individual contribution, it very rapidly, it is all about how skilled and how much responsibility are you able and will you be asked to take in terms of the management of that retirement money, in terms of those voluntary retirement savings that you maybe incentivized to do even from a tax perspective. I mean, Switzerland is an excellent example where people are being incentivized to actually create a voluntary additional contribution on top of the government and occupational pension system. And this is where then on top of the infrastructure that was mentioned by John here, in terms of capital markets, it's also about skilling people to be able to take those decisions where it will be required. So I think it is a vast program indeed, but where I'm also really quite sensitive to is what the pandemic is revealing. And I too have the opinion that health is a very important base for healthy longevity and that health is all about prevention. I mean, when you think about costs and health or rather the medical conditions that are coming up and that are costing so much, prevention will play a growing role and prevention starts with also how populations are feeding themselves in one of the catalysts that I am seeing from the whole episode of the pandemic and where the comorbidities have actually led to mortalities is revealing that some populations have healthier diets than others and this is really contributing to a healthy longevity too. So I am actually expecting nothing less than a food revolution being triggered by what we have all learned during this pandemic.