maximises expected lifetime welfare using our unique standard of living fancharts
Integrated treatment of accumulation and decumulation phases
requires modelling of future annuity values under interest rate and longevity risks
Helps determines ‘optimal’ decisions regarding:
contributions, investment strategy, decumulation strategy and age of retirement
Covers a wide range of alternative contribution, investment and decumulation strategies
Projections take account of quantifiable uncertainty:
using fan charts or bar charts showing worst, expected and best case scenarios
taking account of economic growth, investment, interest rate, inflation and longevity risks
can provide projected life expectancies, as required in the new guidance requirements
Designed to be an explicit ‘nudge’ that overcomes the behavioural barriers that prevent individuals making optimal decisions
Can be adapted to become a retirement planning tool or a wealth management tool (including inheritance planning)
Can take account of all relevant features relating to a potential client: age, gender, occupation, marital status, existing assets and debts, bequest intentions, state pension and benefits, taxes, charges etc.
Can take account of all relevant decisions: how much to save, when to start saving, how to invest the pension fund, possible workbreaks (e.g., maternity/paternity leave), possible unemployment, possible breaks in contributions, equity release, the impact of any insurance policies and, in decumulation, different forms of annuitisation or drawdown or mixes of the two (including guarantees)
Can be used for stochastic scenario analysis or stress testing
Can be used to tailor advice and decisions to a client’s specific circumstances, including their attitude to risk
We can provide risk profiling and risk capacity questionnaires for both the accumulation and decumulation through our sister company A2Risk (www.A2Risk.com)
Users can use PensionMetrics’ default parameters or input their own
Optimal decisions
Optimal contributions
Optimal investment strategy
Optimal retirement age (including gradual retirement)
Optimal decumulation strategy via:
Fixed annuities
Flexible pay-out annuities
Index-linked (i.e., real) annuities
Investment-linked annuities
Enhanced annuities
Drawdown
Mixture of annuities and drawdown
Key points:
It is a scientifically grounded model:
the product of a long research programme going back to late 1990s
based on best science and calibrated (as appropriate) on real data and expert judgement
Our model covers ALL relevant risk factors:
equity, fixed-interest, inflation, economic growth, salary AND longevity risk.