Pick Your Retirement Flavor
Retirement 20/20, alternative to Defined Benefit Plan, 401K on American Airlines' Sky Radio
What do ice cream flavors have to do with the groundbreaking Retirement 20/20 initiative spearheaded by the Society of Actuaries? The SOA’s Emily K. Kessler eloquently explains these seemingly unrelated items in a recent interview with Sky Radio, which is broadcast to passengers onboard American Airlines and Northwest flights. Kessler, managing director of Actuarial Marketplace Solutions for the SOA, is responsible for working with SOA members on research and education initiatives. As part of this role, Kessler is working with the Pension Section Council as it brings together retirement experts including actuaries, corporate benefit managers, public policy advocates and attorneys in the SOA’s Retirement 20/20 initiative.
Kessler, who is deeply involved with re-envisioning the future of retirement systems, addresses the widespread concern by employers, employees and academics around current plans: “There is the traditional defined benefit plan which we see disappearing and the defined contribution plan otherwise known as the 401(k). So you watch the whole world say—there’s two flavors of ice cream out there, there’s chocolate and vanilla and if people say, I don’t like this chocolate ice cream known as the traditional pension plan, all of a sudden vanilla is your only option, and that’s really not good!”
Kessler goes on to explain that the economy thrives on having plenty of options for people, which is where the SOA's Retirement 20/20 efforts come into play. The initiative is analyzing the retirement landscape with the goal of developing a third retirement system independent of defined benefit (chocolate) and defined contribution (vanilla) in the coming years—Strawberry. According to Kessler, “The Strawberry option is to think of lots of different ways we can help prepare people for retirement,” ensuring employers have a wide variety of plans to offer their workforce.
There are many benefits to having a third option alongside the more traditional retirement choices, because the system is encrypted with systematic risks that automatically adjust to support the needs of our volatile economy.
The Retirement 20/20 initiative, the Sky Radio interview and actuaries like Kessler who are experts in their respective fields, reinforce the image of actuaries as 21st century thought leaders by helping build on the profession’s technical competencies while displaying impeccable communication and business skills.
Kessler’s interview will be aired on Sky Radio onboard American or Northwest Airlines during the month of July. You can catch an early listen from your personal computer by clicking here.