The Pension Blueprint podcast video transcript

Episode 4: Your pension future starts now

Celine Chiovitti: Hello everyone and welcome to Season 2 of The Pension Blueprint from OMERS. I'm OMERS Chief Pension Officer, Celine Chiovitti, and I'm so excited to bring you another episode of our podcasts. This time around I'm delighted to speak with Simon Chan, the Founder and CEO of an organization called Adapt with Intent. Adapt with Intent is a consulting firm that works with leaders, educators, and organizations to reframe their thinking, and redesign new ways of working across all life's stages. And what that means is that they're interested in how a person's work life intersects with their lifespan, and how our relationship to the idea of work changes as we move through different life stages. Simon is a graduate of Wilfrid Laurier University and has spent the last 25 years working with people in finance, academia, and the not-for-profit sector. All that experience has given him a unique perspective on how workplaces function, on our relationship with our jobs, and how the idea of retirement will be changing dramatically over the next few decades. And I've been delighted to work with Simon as we've been re-imagining retirement for OMERS members. We get to all of that and so much more in this episode. So here's my conversation with Simon Chan. Hello Simon. Thank you so much for joining us today on The Pension Blueprint. 

Simon Chan: Thank you very much for having me, Celine. I'm really happy to be here. 

Celine Chiovitti: You know that I've been watching the work that you've been doing over the past few years, and I'm just so excited to have this conversation. Thought we would start with you just telling us a little bit about yourself and Adapt with Intent, and what got you interested in this space? 

Simon Chan: So I spent the first 20 years of my career in pensions so I love the pension space. And I was able to work at a number of different organizations, helping individuals build programs to support them when it comes to their retirement savings programs. And so I got really exposed to talking to members, hearing about retirement stories, etc., and what I found very interesting about retirement was that oftentimes people would know, you know, "How much do I need to save for retirement?" But very few times would they actually think about, "What am I going to do?" And that was something that kind of captured in my brain, and made me really think about, you know, is there something that's missing here? After spending about 20 years in the retirement space, I decided I want to get more into the technology space because technology was booming at that time. And during that time, I spent time looking at the future of work, and it seems like people are living in a different way, and wanting to travel, work, and life in a different way. And after spending some time doing a lot of strategy work, I also noticed that there was very few people talking about the idea of longevity and demographics. And so that's how I started to decide to found Adapt with Intent, which is a consultancy firm that actually works with organizations, and their leadership teams to think about what are the opportunities associated with longevity, age diversity, and this changing life course? And how do we design systems and practices to help them navigate more smoothly, versus the kind of systems we have today that are really built for a 60-to-70-year life. 

Celine Chiovitti: So there's so many things that I want to touch on in what you just said, but let's start a little bit with the future of work, and the different sort of attitudes, and generations. 

Simon Chan: Yeah, I think the younger generations really have embraced this idea of flexibility. And this was happening prior to the pandemic. So this idea of, like, younger people looking for flexibility, looking at their life, maybe not as in the traditional three-stage life that we're accustomed to, which, you know, our parents' generation was - you went to school, you know, you went to work, and then you full stop retired. 

Celine Chiovitti: Right. 

Simon Chan: Most people kind of did that in lockstep. It was, there's, you know, you kind of worked at the same place, there was a lot of stability. And what we saw is more and more younger generations starting to realize that life is more fluid, and that likely they're going to live much more of a multi-stage life as opposed to these, you know, very finite three stages. And so what we started to see prior to the pandemic, and I think the pandemic has accelerated this, is this idea of focusing on flexibility, focusing on work-life balance. What's interesting about Gen Z, which may be a little bit different than the Millennial generation, is that they've been through some economic turmoil, the financial crisis. They still want some level of job security. And so they're looking for ways to have some job security, but they also really value that flexibility. And I found a really interesting stat that I've seen through some of the work that's been done at one of the universities I work with, with their student base is they found that almost 50% of students would actually turn down a raise for the trade-off of more flexibility. So I think that's some of the thinking that's going on. And I think with COVID, with the advent of, you know, much more acceptance of remote work, and hybrid work, this trend has been much more accelerated, particularly for the younger generation. 

Celine Chiovitti: Yeah, and it doesn't seem to be going away, that's for sure. 

Simon Chan: No. 

Celine Chiovitti: I think the expectation is there. Before we go further, let's Generation Z, what is the age...range there? 

Simon Chan: Generation Z is probably about 25 to 26 years and younger. 

Celine Chiovitti: 25. Okay, okay, perfect. So that really is the future of work. And so when you talk about those shifts and so the expectation of more flexibility, and work-life balance, I think it starts with Gen Z, but that starts to actually reshape cultures throughout the work and impacts on all workers there. Do you think that companies today are modernizing? Like are they changing, and adapting for that sort of new way of working? 

Simon Chan: Yeah, I think they're slowly adapting. I think it really depends on sector. So I think it's going to be interesting to see how organizations are going to be forced to adapt because you know, by 2030 you're going to have 30% of the workforce be Gen Z. So it's now going to become a materially part of the workforce. So I think organizations are adapting particularly in places where there's highly, it's highly competitive. Tech, you know, as an example where I've spent a lot of time. You have seen organizations really think about, "How do I create more flexibility?" But that's also spread to more traditional organizations. They recognize that there needs to be more of a flexible value proposition for employees. That the employee experience is no longer one size fits all. 

Celine Chiovitti: And so if I am someone within that age group, and so I'm Gen Z and I'm thinking about my future, you talked a little bit about, it's no longer this three-life stage approach. It's more chapters and journeys. What does my retirement look like? How would you advise me as far as thinking about retirement planning? 

Simon Chan: Well it's, you know, having been in the retirement space for a while, it's very hard to get younger generations to focus on something that might be 50 years out. It's something that they, you know, don't necessarily see in the immediate term given all of the challenges they have to face today with, you know, inflation, rising costs of living, etc. But I think that what we're starting to see in the Boomer generation, in terms of how they're adjusting to retirement, where it's no longer a full stop anymore. I think that trend's going to continue. And I think what Gen Z's going to see is a much more phased, or again, back to the word "flexible," a phased approach to retirement. And in some cases, by the time that they get there it may not, there may not be something that's called retirement. I think there's just going to be different stages that they're going to work through. Some of the retirement elements that if we would say in terms of Gen Z are around, you know, part-time work. They may look at, you know, looking at staying involved in some sort of freelance capacity, starting their own business. They may take mini-breaks as opposed to one full retirement. They may take small retirements where they retire for a couple of years, re-engage back in work. And I think their lives are going to be much more of a portfolio life. 

Celine Chiovitti: I think what you're saying is people aren't going to work for the rest of their lives. It's just the way we think about how we work, and what we do for the next, you know, 50, 60, 70 years might look a little bit, a little bit different. 

Simon Chan: I think people might need to be much more intentional about designing what their life might look like. And that sounds kind of abstract, but you know, there's a bit of a process to this, right? You need to understand more what your values are, what strengths you bring. And so you need to think about how do you actually go about, and spending time thinking about what's next for you in a much more intentional way. And I think that certain life stages, and certain life transitions, people will be more apt to think that way. So I do a lot of work with universities. I would say that universities actually help people, younger people, think about what's next. And I think we need to infuse more of these moments of time, and structures along the life course, where we have people pause, and reflect, and think about what their strengths are, what their values are, where they want to spend maybe their next chapter, the next five years, and help them design that future, and then ensure that they have the financial stability to actually back that up. 

Celine Chiovitti: I love what you said, and I'm going to try and quote you, and I'm, hopefully I don't kill it. "People need to be more intentional about sitting down, and designing what their life will look like." I think those are just great words of wisdom for anyone, whether it's about retirement planning or not. Let's talk the financial aspects. And so again, Generation Z, you've spoken about some of the actual, you know, macro trends facing them today. It's not easy with cost of living being so high, and housing affordability being so low. Many people are just trying to figure out their own sort of day-to-day and how to get through the month. And yet we're asking them to think about their future and saving for their future. So if I'm in my 20s, 30s, 40s, give me some tips. What tips would you give me about financial, and retirement planning? 

Simon Chan: So I think the first thing is again, leverage the power of compounding. 

Celine Chiovitti: Leverage the power of compounding. 

Simon Chan: Yeah, so start early. Know that you may be working for longer than in the past generations, but there's a benefit, there is a benefit to that, assuming there's more flexible work arrangements is that you can save for a lot longer. And that power of compounding actually is to your benefit. I think one of the most interesting things I heard recently was an author by the name of Morgan Housel who wrote a book called "Psychology of Money." And he said that Warren Buffett's wealth, 99% of his wealth came after his 65th birthday. And so it just shows you that power of compounding, and playing that long game. Get into habits, right? And make them into systems so that you don't have to think about it. Anything that you got to think about is just a mental load. So the more that you can do things where you're paying yourself first, things that are automatic to pay down debt, etc., those are some of the things that I would say that you want to put into place early. Your people you spend time with, the people that you hang out with, they often influence your habits. So if you really want to go down this path of really ensuring that you have the financial security, or the health, or the health that you want, spend time with people that are of the same circle that are going to support those behaviors and their habits. I think starting to spend more time thinking about what are the benefits of a longer life, and how can I lead my life more in phases and chapters? And being able to actually build the skills to manage multiple life transitions. Being able to be curious, to find what that new path looks like and being able to be adaptable to ensure that you can navigate those paths. As you design what is going to be your kind of next chapter, etc., go back to your finances, make sure that your finances are going to support that. I think when you're early, I think, you know, start simple, right? Save. As your life gets a little bit more complicated, you may need to seek more professional advice, but really oftentimes in finances we overcomplicate it, and it's really just going back to first principles. 

Celine Chiovitti: I love that, and so I think the four things that you said, save, and start early. Make it automatic, right? Your habits. Surround yourself with people that live the way you want to live and take some time to kind of get thoughtful about your future, and do that periodically. Those are sort of four really easy tips that I think all of our listeners can take away. So that's all really great advice, Simon. When you give that advice to younger workers, is there skepticism there? Do they hear it? 

Simon Chan: Yeah, I think that the younger generation has a little bit of skepticism, particularly of financial institutions because they, during their formative years, went through the financial crisis, economic turmoil, etc. Also, they have access to a lot of information, and a lot of different opinions, which has its pluses because you have diverse points of view, but also has some challenges because there's so much information that's out there. So it does, sometimes the advice is brought on with, you know, consumed with some level of skepticism. Also, let's talk about different generations. There is, you know, the generational divide. That's a thing. I think people do feel like, you know, sometimes it's like, "Okay Boomer, why are you giving me advice based on a completely different context?" So I think this goes back to this idea of intergenerational collaboration and relationships. I think it's really important for all generations to understand that we all grew up in different contexts. And I think it's important for us to think about if, you know, for the younger generation, oftentimes they're labeled with, you know, things that are maybe not as kind. But if we took ourselves, and put ourselves in their shoes, given the economic uncertainty, given high levels of inflation, etc., would we behave the same way? So I think when we give advice, I think we have to be empathetic to the different context that the generations are operating in. And I think the best way to do that in workplaces, in learning environments, etc., is to actually have older and younger come together to have some of these conversations so they can learn from each other. Because there's new models to be learned, but there's also a lot of wisdom in some of the ways that would, that we did life planning, retirement planning, financial planning in the past. 

Celine Chiovitti: That's right. That's wonderful. And I want to talk a little bit about the longevity issue, and the greying world that we're sort of seeing. And so when we think about, you know, Canada as a whole, we know we're getting older, and then you factor in the reality that 60% of Canadians don't have access to a pension plan. And starting to think about what that actually means to communities and to the economy. We've had a conversation about social infrastructure of pensions and starting to see it in that light. Can you comment on that? 

Simon Chan: When I think about the fact that we have a greying society, I also think about the fact that we actually have an age diverse society. If you look back, you know, at the turn of the century we would have, we would've had an age pyramid where we had a lot of young people, and very, very few old people. And today what we have is actually pretty much diversity across the different ages. And so I go back to the question of longevity which is often looked at as a risk. How do we look at it as an opportunity, and how we leverage this age diversity. So I think again, I think it's about building structures where we can have older and younger come together to work together on particular challenges, understand each other. These are some of the things that I think are the opportunities that come along with the age diversity that we have. So we do tend to focus a little much on the kind of greying part of it. But I also think about what are the benefits of having older people available to still stay engaged? Because I think oftentimes our social narrative when it comes to retirement is that you've reached retirement, congratulations, off to golfing, off to traveling, etc. And I think after a year or so, I think, you know, based on my experience talking to retirees, a lot of them feel like, "well, am I still useful?" And so how do we leverage that human capital? How do we leverage the wisdom of people who are older for the betterment of our younger generation, the Gen Z, the Millennials, as well as society? Because I think there's are a lot of models that'll emerge where older and younger will work together to benefit communities. 

Celine Chiovitti: I'd love, I love seeing that. There are so many examples out there right now, but I think there is work to be done to sort of change the biases around aging in society. And I love seeing sort of, there's a social media aspect of seeing people in that age bracket starting to break that down and change those images. And I think that's what's needed. What do you say to the argument that, you know, if you have people working longer, they're taking away, somehow, jobs from a younger generation? 

Simon Chan: We've had different segments of the market, labour market, enter before, and that hasn't necessarily taken away from jobs. So women entered the workforce in a very meaningful way in the last several decades. That didn't necessarily take away from roles. And I also think that for the older generation, I think we need to look at, and spend time understanding, what are they looking for? So oftentimes when we say, "Well people are staying in the workforce." We're making the assumption that they want to stay in the workforce in the same way that they do today, which is working, you know, 50, 60 hours. In my discussions with people who are thinking about their next chapter, oftentimes what they want to do is they want to work, but they want to work on their own terms. So there's actually good data out there to say that over 50% of people who are retiring today, want to work in some way, shape, or form. But that doesn't mean that they want to work 50 to 60 hours. They may want to work part-time. They may want to work on specific projects. And so how do you leverage the desire for flexibility, and actually pair it with the younger generation so they can actually work together, and learn from each other? And it actually is, it's a better outcome for everybody. And I think those are some of the models that are starting to emerge. But a lot of workforces today still have, you know, ageism embedded into it. There was a stat that was the AARP put out that only 8% of the Fortune 500 companies actually have age as an element of their diversity policies. So I think age-friendly employers, age-friendly communities, I think those are going to be things that we're going to see in the future. And age-friendly isn't just about embracing older adults, it's about embracing all generations. 

Celine Chiovitti: All generations. 

Simon Chan: And having them work together. 

Celine Chiovitti: Yeah. 

Simon Chan: And co-exist together. 

Celine Chiovitti: Yeah. Are there any countries that we should be looking out at that have done this well, that are starting to do this well? 

Simon Chan: Yeah, I think some of the countries that have already reached the Super Age, so the Super Age is defined by being 20% of your population's over the age of 65. So countries like Japan, Singapore, Germany, those are all countries that are, have an aging population that are ahead of us. And there's certain models that are, that we can look at over there in terms of how they think about workforce. How do they think about education, etc., and how do they keep all ages engaged? And it's not about just keeping them engaged. There's some really good health reasons for this as well. When we think about kind of the more macro trends. Preventative health, how do we actually make sure that people, if we're going to live to 90 to 100 years old, how do we make sure that our health spans meet our lifespans? And so some of those countries have really gotten behind making sure that we have the key elements of health for our communities. So creating more opportunities for people to engage together. I know you're familiar with "The Blue Zones" work that Dan Buettner has done. We need to create environments where we have an opportunity for people to feel connected to something. We need to make sure that we're spending more time on that preventative health measures. And then we need to make people, keep people engaged both mentally, physically, and in general. And I think some of the countries that have already faced some of these challenges are inspirations for us. But I think Canada's very, very early. We've talked a lot about this, there's not a lot of work that's being done in the longevity, and demographic space here in Canada specifically. 

Celine Chiovitti: So we need, there's more work to be done, but more conversations like this would help that. 

Simon Chan: Absolutely. 

Celine Chiovitti: What's the difference between lifespan and health span? 

Simon Chan: Lifespan is obviously how long we're going to live. And health span is really about, how long we will continue to be healthy without some sort of disability or disease, etc. And ideally what we want to have is a tight relationship between health span and lifespan, because the last thing we want to do is, you know, live for a long time, but not have our health, and not have our financial security 

Celine Chiovitti: Right. Yeah, so the fact that we're potentially living into our 80s, 90s, and 100s is great. I'd love to be there, but are there things I could do today to make sure that I actually live healthy in that time? 

Simon Chan: Yeah, and I think going back to the younger population in Gen Z, again, back to compounding, right? It is the habits that you build today, you know, are going to live with you. And if you build great habits, those will live with you up into your 70s, and 80s, and 90s. But if you build poor habits, the same thing will happen. And I've done a lot of work cross generations when around retirement, etc., and a lot of the people that are in their 70s, and 80s when I talked to them about like, what is the one thing that you would've told your 30 or 40-year-old self, it often comes back down to health. To make sure that they've done the things to ensure that they're able to enjoy the retirement that they have. And a lot of it starts early. 

Celine Chiovitti: What about tips for employers in this? How do we navigate this new workforce with multiple generations? 

Simon Chan: Yeah, for employers, I think the theme of flexibility isn't just for the younger generation. I think this is something that's going to be required for all generations. An interesting example, and we talked about employer examples. One of the most interesting examples I've come across from an employer standpoint is an organization called Unilever. So they're a large consumer goods organization, and they created a program called U-Work. And effectively U-Work was designed for retirees. So people who were retiring, they wanted to retain their workforce or retain that knowledge. And basically, what they did was they created an arrangement where someone could actually become a contractor after they finished working. And they would give them a little bit of pension credits, they would give them some benefits and a retainer, and then what they would do is actually source projects for them based on their specific skills. So they might work on, they might come to you and say, "Celine, you know, we have a four-month project to work on. You've got great background in strategy, or you know, a particular system, and you could work on these particular projects." And so you would basically become a gig worker for the organization. This was rolled out in some of their European countries. They've rolled it out now globally. But what was really interesting was they actually started to see that that type of flexibility was of interest to people who were younger. Think about people who are thinking about caring for kids, they want more flexibility. Younger generations who may want to travel, etc. So they've started to look at how do we take that down market? These types of innovative practices to actually have more flexible workforce models, I think is going to be paramount for people who want to, organizations who want to attract talent. The second thing is, the younger generation in particular, they are looking for organizations that where their values align with the values of the organization, and they want to feel like they're making an impact. Yeah, I'm very inspired by this generation because some of the things I see them focusing on are really around, "How do I make an impact? How do I ensure that I am finding organizations, and finding things that align with my values?" And they really want to make a change. And I think when you think about their desire to make that change. If you think about their aptitude towards technology, and thinking about new ways, there's an immense amount of opportunity. Where I get most excited though, is when I think about people who are thinking about retiring, or what's next. Oftentimes they have the same things. Not all of them, but many of them who are growth-oriented actually want to make an impact. They want to stay connected. They want to help the next generation. And so what I'm really inspired by, this opportunity that we have ahead of us is again, how do we design our systems, our social infrastructure if we will, to encourage the behaviors that we talked about, those compounding behaviors, of like making sure you're financially secure, that your health is in place, that you're building relationships and community, but also how do you again, leverage those things to bring the excitement that the younger generation has around making an impact with people who have some of that experience that can help them unlock some of the innovation they have in turn. And also for some of the younger generation to really influence the older generation to think about new ways of working, new ways of making an impact. And I think at a community level, I think there's a lot of opportunity to bring the retirement ecosystem together, the pension plans, the universities, the housing, to really leverage this intergenerational opportunity to make an impact at a community-based level. So those are some of the things that I see that are really exciting. But it takes work and it takes leadership, quite frankly, at the strategic level to get these organizations, like in OMERS, to really lean in, and make an impact in that community, and work with others so that we can leverage this power, and excitement of the younger generation that's coming up. 

Celine Chiovitti: And it's so important to keeping sort of our communities vital and prosperous. And so I am all about bringing together multiple stakeholders to have a voice in setting the future. And I definitely think the future workers, the younger generation, have to have a meaningful voice at that table. 

Simon Chan: For sure. 

Celine Chiovitti: And then lastly, I would ask you, what about some tips for pension plans like us, and the industry as a whole? I know we've had a conversation about, you know, was the pension system designed for 100-year life? What do you think we can be doing differently? 

Simon Chan: So I think the first thing is, I think with, because pension plans play such a key role in the, the retirement planning process, I think one of the things that pension plans can do, and I know that OMERS is working on this, is to help members think more holistically about retirement planning. So oftentimes we talk about how much do you need? Which is obviously very important. But when you talk to people who have retired, oftentimes it's not money that they talk about, you know, they talk about the other elements such as, "What am I going to do? You know, what's my purpose? Who am I? What am I going to do when I get up in the morning? How do I put a little bit of structure around my day?" So I think that, "And how do I create connections?" These are things that you can't just all of a sudden snap a finger and create a new set of friends when you get into retirement. How do you help people think about this prior to retirement So I think that's one element that is that pension plans can do. But also I think pension plans can take a step back, and spend some time talking to their various generations, and getting a better understanding of what their career journey might look like, and how do you look at plan design changes that may allow for some more flexibility, allow for some more portability, etc. Because I think those are going to be really important in terms of this, you know, this life course that's much more fluid, that has multiple transitions. How do you support breaks, sabbaticals, those elements in a pension plan? And then lastly, which I know the industry's already doing, but needs to continue to do, is just build financial literacy. Helping all generations understand how important a pension plan is. You talked about social infrastructure. I firmly believe that, you know, pensions are social infrastructure along with health, our healthcare system as along with our education systems, it's equally as important. Because these are the foundational elements that society needs to have a good life, and to have thriving communities. 

Celine Chiovitti: Simon, thank you so much for sharing your wisdom, and your tips for us today. And I know they were really, really helpful to all of our listeners. It's always great seeing you. 

Simon Chan: Thank you very much for the opportunity. I'm really excited that this conversation is being had because it's not one that often happens here in Canada. And I love that we're having this conversation to raise the profile on this topic. 

Celine Chiovitti: Thank you, Simon. 

Simon Chan: Thank you.