Increased Life Expectancy, Lack of Preparation for Retirement Plaguing Businesses and Retirees, Say Actuaries Living to 100 Symposium Addresses New Challenges Faced by an Aging Workforce

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Sponsored by the Society of Actuaries (SOA), the international Living to 100 Symposium highlighted why people are living longer, what type of challenges they are facing and what this means for employers. The conference balanced a discussion of the biology and science of aging, healthcare and quality of life issues, life insurance, use of annuities in managing retirement risks and statistics related to mortality trends and the aging population. The symposium brings together actuaries and longevity experts to share information to advance the state of aging research and to refine projections of the mortality and future number of individuals at high ages.

The framework for retirement is based on men's longevity and retirement needs. Since women on average earn less than men, the current practices aren't enough for women and their increased likelihood of living longer. If we created a framework that works for women, it could be applied to men's retirement as well.

With increased life expectancy and rising healthcare costs, individuals are faced with growing challenges in maintaining their quality of health and lifestyle in living to older ages. As a result, employers and governments are faced with new opportunities and challenges as they respond to an aging population. Those were the central topics of discussion among nearly 200 actuaries, demographers, gerontologists, biologists and researchers from across the globe who participated in the 2008 Living to 100 Symposium in Orlando.

Sponsored by the Society of Actuaries (SOA), the Living to 100 Symposium highlighted why people are living longer, what type of challenges they are facing and what this means for employers. The leading issues of the conference included understanding the aging process and the resulting consequences to life spans, longevity risk, retirement, healthcare and social and financial systems. The conference balanced a discussion of the biology and science of aging, healthcare and quality of life issues, life insurance, use of annuities in managing retirement risks and statistics related to mortality trends and the aging population. A key value of the symposium series is that it brings together actuaries and longevity experts to share information and differing perspectives to advance the state of aging research and to refine estimates and projections of the mortality and future number of individuals at high ages.

Bob Johansen, FSA, MAAA, founder and co-chair of the symposium, pointed out that the presence at this symposium of so many of the world's experts in the field of longevity and its consequences indicates the importance of these subjects and the forum initiated by the SOA.

A leading actuary noted that a combination of factors affect longevity. "There is no simple equation to living to 100. It involves socio-economic and genetic factors, birth order and healthy living," said symposium co-chair Tim Harris, FSA, MAAA, principal, Milliman, Inc. "Quality of life is key in living to an older age and potentially to 100 years. However, people living to 100 face great odds of not having enough funds and could ultimately run out of assets."

"The implication of longevity is a huge blindspot for employers, especially since many individuals are looking to retire at age 65 like their parents did before them," said presenter Valerie A. Paganelli, FSA, EA, MAAA, senior consulting actuary, Paganelli Consulting. "There is a major opportunity for employers to embrace and accommodate the aging workforce who are apt to need to work longer in life."

Session presenter Dawn E. Helwig, FSA, MAAA, principal, Milliman Inc. noted that, "With living longer also comes the issue of health and how to cover rising costs, especially if long-term care is necessary. Fifty percent of people may not need long-term care, but it is the other half who may need it that poses a challenge with the current costs. Only a small portion of employers offer long-term care to their employees, so a tipping point is necessary if the needs of potentially millions across the U.S. are to be met."

Additionally, Beverly Orth, FSA, principal, Mercer, noted the differences among men and women in managing their retirement. She said that, "The framework for retirement is based on men's longevity and retirement needs. Since women on average earn less than men, the current practices aren't enough for women and their increased likelihood of living longer. If we created a framework that works for women, it could be applied to men's retirement as well."

Other key speakers of this triennial symposium included Bruce Schobel, FSA, FCA, MAAA, president of the Society of Actuaries, who moderated the discussion on living to 100; Dr. S. Jay Olshansky, professor at the School of Public Health, University of Illinois at Chicago, who discussed population forecasts and the need for healthier living to increase quality of life; Dr. Cynthia Kenyon, director of the Hillblom Center for the Biology of Aging, University of California, San Francisco, who discussed the implications of genes capable of increasing life spans; and Dr. Leonard Hayflick, professor of anatomy, University of California, San Francisco, School of Medicine, who reviewed the biology of aging and current studies geared toward better understanding the aging process. Additionally, many actuaries talked about the implications of the aging population on the financial services sector and the opportunities and challenges it faces.

Steven G. Vernon, FSA, EA, MAAA, producer of The Quest: For Long Life, Health and Prosperity, and president of Rest-of-Life Communications, noted, "There is a 'Catch-22' for individuals as they need to manage their resources for the rest of their lives, yet they don't know how long to expect to live. This is further compounded by the number of individuals taking a lump sum, but not planning accordingly to make it last through their entire retirement."

This is an area where employers can play an important role, Paganelli said. "Employers can take the lead by acting as intermediaries in helping aging employees remain in the workplace to reduce the risk of outliving their assets, which in turn would help strengthen the overall marketplace."

About Living to 100
Living to 100 is an international triennial symposium on high-age mortality and related issues supported by more than 50 sponsoring and participating organizations. Actuaries, demographers, gerontologists, biologists and researchers from around the world attended the event to discuss the implications of living to older ages. The symposium compared experiences across countries from India to the United Kingdom, Canada, Mexico and the United States since all of these countries are experiencing profound changes.

About Actuaries
Actuaries bring a complex future into focus by applying unique insight to risk and opportunity. Known for their comprehensive approach, actuaries enable smart, more confident decisions.

About the Society of Actuaries
The SOA is an educational, research and professional organization dedicated to serving the public and its 19,000 members. The SOA's vision is for actuaries to be recognized as the leading professionals in the modeling and management of financial risk and contingent events. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems involving uncertain future events. To learn more, visit http://www.soa.org.

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