"Pension underfunding is the climate-change moment of social systems" – the line that struck a chord at media outlets across the globe in May, when Michael Drexler said it accompanying the release of the World Economic Forum's white paper on retirement investment systems. A "global pension time bomb with a funding gap set to dwarf the world GDP" read the news release headline.
As head of financial and infrastructure systems at the WEF, Mr. Drexler, unfortunately, is neither wrong nor exaggerating. It will be very hard, even for seasoned pension sector insiders, to properly address such a massive challenge. That's especially so since effective solutions might structurally change the fundamental landscape of the industry.
The reality is that borders between industries, products and geographies are fading away. To capitalize on emerging possibilities, one should transcend existing silos and traditional concepts or definitions. Consumer behaviors are changing, as are social contracts and employment and retirement patterns. With that perspective in mind, allow us to assess the changing landscape, look far ahead at a future that might seem generations away, and bear with us as we zoom back in on the currently thriving niches and socio-behavioral changes happening now that will transform the retirement investment industry.