Taking matters into our own hands

More and more people are relying less on government funding for their retirement.

One of the biggest changes taking place within old-age provision is a shift in mentality: there has been an overall increase in awareness and self-responsibility to save towards retirement. Consequently, people are relying less on government funding. The aging population and longer life-expectancy rate combined with low fertility rates are putting stress on mandatory funded pension schemes. As it becomes apparent that socio demographic trends are making government pension plans difficult to maintain in Western Europe, we are seeing an uptick in personal savings for retirement. Although this is taking place in many countries throughout the world, emerging markets like Asia and Latin America are seeing the biggest transformations.

Retirement system assets in the OECD (comprised of pension funds and public pension reserve funds (PPRFs)) represented 61.9% of GDP in 2014 - up from 51.8% in 2011 - with USD 30.2 trillion in assets under management1. The accumulation of savings in such financial channels has reached an all-time high. People are increasingly recognizing the need to plan and provide for their own retirement and many are doing this through retail channels. Globally, this trend is one of the largest enablers for growth in the asset management industry. Institutions have a major opportunity to play an important role as conduits of productive long-term capital.

Evolution of EU-domiciled ETFs

Evolution of EU-domiciled ETFs 1. OECD, Annual Survey of Large Pension Funds and Public Pension Reserve Funds, 2015 http://www.oecd.org/daf/fin/private-pensions/2015-Large-Pension-Funds-Survey.pdf

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Dariush Yazdani

Grégory Weber

Xavier Domalain