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Public retirement systems: Why retirement really begins at 21

Retirement systems are up against a new age of challenges that call for more effective tactics and tools brought to bear throughout people’s lifetimes.


The silver tsunami has created a new wave of challenges for retirement systems—from unfunded liabilities to the threatened longevity of retirement programs. These new demands call for real and sustained transformation. For example, public retirement agencies must now engage with people in new ways—and also earlier in their lifetimes. Agencies need to think differently, and operate differently. Retirement systems must take a whole person view of customers, charting a journey from when individuals join the workforce, to when they retire. Along this journey, agencies must have more and deeper interactions during the working years—a period when agencies can help people help themselves.

It’s an outdated idea that when work income stops, retirement support begins. Today, people should begin to think about and plan retirement as early as 21. They also may work past 65. Therefore outreach and the ongoing relationship that public retirement agencies have with workers must begin early and continue beyond traditional retirement age.


People who are working and people who are retired have different needs. Public retirement systems traditionally have an organizational or customer split between these groups. Today’s retirement era demands that agencies break through these boundaries and rethink when and how they connect with customers of all stages of life.

In most cases, retirement should be the end of a customer’s relationship with public retirement agencies—not the beginning. Interactions with retirees should be automated and low friction—an initial assessment of entitlement followed by decades of smooth and regular payments. In the near future, agencies must focus on making pensions as efficient as possible, but retirement systems must also be about making an impact much earlier in customers’ lives.

Customer engagement should begin the moment a young person enters the workforce. Interactions should be ongoing, and messages should be tailored according to stage in life, but also useful for helping people set up, build and sustain a strong retirement plan.


The enormous shortfall in retirement system funding worldwide is a top-of-mind concern for public retirement organizations—and for people from working age through retirement. In fact, according to the Accenture Global Retirement Services Survey, 82 percent of respondents are worried about their financial situation after retirement, and 57 percent believe that their standard of living will drop when they stop working.1

Skyrocketing unfunded liability and other retirement system challenges are becoming common knowledge, and that breeds common uncertainty about the future. In the US, the unfunded liability of the federal government’s pension systems exploded in fiscal 2011 to $761.5 billion dollars—an increase of $139 billion from its fiscal 2010 deficit.2

Sustainability of systems is also a worry for public retirement systems, members and the legislature. The fall in asset values, coupled with a rise in government debt, put the longevity of retirement systems at risk. In essence, this translates into a wide gap between the income that people expect to live on during retirement, and what they will actually get.


Download PDFDownload the full point of view to read about how much people have saved, and what they truly need for retirement. [PDF 169 KB]

1Accenture report, “Global Retirement Services Survey: Consumers See the Light as Retirement Shortfall Looms”; July 17, 2012; online at:,
2Federal Times; “Federal pension systems’ unfunded liabilities skyrocket”; Feb. 20, 2013; online at


So how can public retirement systems help people to help themselves? By engaging members early and often to help them be more realistic about retirement goals, and also understand what they need to contribute.

Outreach. It is critical to effectively communicate with members when they are active and contributing. Retirement systems should pursue tools, such as online retirement calculators and modeling services, which help with life decisions about retirement. Efficient call center operations will be important to offer members quick access to personnel who can answer questions.

Analytics. Analytics can help identify and target working age people who are in a position to help themselves. Using data from third-party resources, public retirement agencies can determine which citizens are enrolled in employee retirement programs, and which citizens are not—but should be. From there, agencies can target appropriate outreach.

Risk management. Improving regulation of employer retirement programs can build savers’ confidence and improve the credibility of the public retirement system industry. One way to do this would be to use analytics to build a risk-based view of employer retirement schemes to increase transparency, support early intervention and assistance—and reduce the incidence of financial default.


Download PDFRead suggestions for using social media as an outreach tool. [PDF 118 KB]


Read the full point of view, Why Retirements Really Begins at 21.

Listen to this podcast to learn why people should begin to think about and plan retirement as early as 21.

Retirement systems are up against a new age of challenges that call for more effective tactics and tools brought to bear throughout people’s lifetimes. These range from unfunded liabilities to the threatened longevity of retirement programs.

In this podcast Owen Davies, Managing Director of Accenture Pension Services talks about how public retirement agencies need to engage with people in new ways and why retirement really begins at 21.