Home » News

Interior Banner

Member Understanding A Decumulation Risk


Member understanding is another risk when it comes to products for the decumulation phase of retirement saving, says Paul Partridge, director of investment marketing in group retirement solutions at Manulife Financial. In the ACPM Ontario regional council session ‘Managing Asset Decumulation Risk in Capital Accumulation Plans,’ he said there are a number of risks faced by retirees when it comes to creating a retirement income stream. These include inflation, market volatility, longevity, liquidity, member behaviour, and estate planning. In terms of member behaviour, he said the members can be their own worst enemy as they undermine returns by switching funds or staying out of the market too long. One area that is seeing growth is target date funds. They are doubling is assets every few years. However, one alternative, annuities, is being rejected because people think they can do better, said Robert Klosa, thought leader at Sun Life. They believe it is a bad time buy them or they are concerned about liquidity if they need more money. And estate planning is another factor as people don’t want to lose their savings if they die early. However, an annuity is what most people need in retirement and the industry is faced with the fascinating problem of overcoming these hurdles to encourage people to purchase annuities.

Courtesy of Benefits and Pensions Monitor website News Alerts 

Back to < News

Email Page Printer Friendly