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Passion for Profession Will Continue, Despite Retirement

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Malcolm Hamilton is one of Canada’s leading experts on retirement planning, frequently appearing in the media to discuss how people can best prepare for life after work. But when it comes to his own retirement, he is "fairly ambivalent" about the prospect of stepping away from the office for good.

At the end of the year, he will retire from his position as a partner at Mercer in Toronto, ON, and he said: "I have no elaborate plan or clear vision of what this will mean.

"My workload has already gone from 100 per cent to about 60 per cent, which seemed easy enough to do. I’ve been reading, following the news and peer reviewing papers, which has been very pleasant. Once I retire, I imagine I will do less public speaking and more writing. I will not miss anything because I will carry on with the things I enjoy: writing, speaking, and learning. I have a high level of interest in Canada’s pension system, and this will continue."

Looking at the profession that he joined in the 1970s—he became a Fellow of the Society of Actuaries in 1977 and an FCIA a year later—Mr. Hamilton is concerned at the changing landscape for pension actuaries and other experts.

"We now know that defined benefit plans are expensive and risky for companies to sponsor, but that wasn’t apparent when we had young plans and favorable economic conditions. Defined benefit plans need to go away. Hopefully they will be replaced by target benefit (TB) plans which, I believe, have a better structure. Public sector plans are beginning to experiment with TB designs and this could be a promising source of activity for actuaries. But it will be quite some time before we see companies in the private sector moving in that direction. They will experiment first with defined contribution (DC) plans, which can and will be improved by moving to ‘smart’ defaults. We are just at the beginning of the DC learning curve now; if the experiment succeeds, companies won’t need to try TB plans. But if it fails, TB plans will be the next place for them to turn. DC and TB plans, once we learn how to design them, can do a good job for both employees and employers."

Although Mr. Hamilton gave up forecasting many years ago, he added: "It is going to be a miserable time for people trying to save for retirement. No pension plan design can prosper in this environment. We did some good things in the 1990s; for example, partially funding the Canada and Québec Pension Plans was a good move. We have done better than almost every other country in preparing for retirement largely by doing the opposite of what other countries were doing. For example, Canada was paying down its public debt between 1995 and 2008 while the rest of the G7 was heading in the opposite direction. Unfortunately, by increasing the eligibility age for Old Age Security to 67 we have apparently decided to follow the lead of countries that have consistently mismanaged their retirement systems. This is a road to nowhere."

Focusing on his own years of retirement, Mr. Hamilton—now 61—said: "People’s mental faculties decline, and there will be a time when I am not smart enough to understand what is going on, but I hope that is 20 years off. I am not planning to disengage from economic or retirement issues, just from working for money.

"I look at someone like [former University of Waterloo professor] Rob Brown, who seems remarkably busy even though he has retired. People like that don’t disappear suddenly. I hope to do the same."

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