The WEF has made clear that the situation is not trivial, likening the scenario to ‘financial climate change.’

Like climate change, some of the early signs of this retirement savings gap can be ‘sandbagged for the time being – but if not handled properly in the medium and long-term, the adverse effects could be overwhelming” via The Pension Crisis Is Worse Than You Think | Seeking Alpha

The above quoted article provides a good overview of this global funding shortfall, but what is notable is that the discussions around the pension crisis rarely anticipate any significant sudden increase in life expectancy – something readers know is likely not that far away!

Ageing will soon be regarded as a disease in itself, and therapies designed to “cure” it, some available now, will be commonplace. New techniques, including organ transplantation as a matter of routine, cell therapies and genetic engineering will become mainstream. via Juvenescence Book Overview

So what happens to pension funding if we have see effective (and affordable) therapies that extend life spans? Even a one year increase in life will impact pension plan viability – making any under-funding even more pronounced. A five or ten year increase would mean most if not all pensions would face shortfalls so large changes would be required. What changes do pension plans make when they get into funding problems? Some combination of;

Deferring start date of pensions

Increasing required pension contribution rates

Reducing the pension formula to reduced promised benefits

Lowering or eliminating inflation indexing of payments

All of which impact the money you will receive. Given this is not a popular prospect, it is not a stretch that organizations and legislators decide to push the problem down the path for others to deal with later. But with the prospects of life extension compounding the issue, “later” will need to be “pretty soon”!

While other economic changes (…like lower costs of goods and services due to automation/AI) may reduce the bite of a reduction in pension income, the prudent strategy is to not count on your full pension promises to be fulfilled. Some combination of working longer, or starting a “retirement business” makes even more sense.