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Speaker(s): Juergen Fodor (Willis Towers Watson)
This presentation (30 minutes) is intended to provide a comparison of the new pure DC plans in Germany - coming into effect in 2018 - with existing DC plans in other countries, in particular the Netherlands, United Kingdom and the United States.
The comparison will start with the various aspects of the accrual phase. For example:
- Are there behavioural incentives that reward those employees who save more for retirement, such as matching contributions from the employer?
- Is automatic enrolment mandatory, and if so, is it possible to 'opt out'?
- What are typical or average contribution rates? Are there age-related contribution structures or are flat-rate contributions mandatory by law? Are there any minimum contribution rates?
- Do employees have any investment options or are some kind of 'default funds' primarily used? What role do life-cycle investment strategies play?
- To what extent is there an individual or a collective attribution of plan assets to plan members? What kind of buffer or solvency rules are in place to reduce the impact of the financial markets' volatility.
The presentation will continue with the possible issues at and after retirement:
- What options do employees have to draw down on their retirement savings?
- Are annuities offered or even mandatory? What is the typical or mandatory actuarial mechanism to convert the accrued capital into an annuity?
- How can individual annuities evolve over time? In particular, what role do they play in the financing vehicle's annual performance? Are annuities allowed to decrease?