Duke of Marmalade
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I give up trying to get this link to work. See Colm's post which does have a successful link.
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AI take on Colm Fagan's proposal
- Thread starter Duke of Marmalade
- Start date
I always suspected that a lot of this AI stuff was just hype...
Duke of Marmalade
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My natural instinct was to be skeptical. But have a look yourself. The (beta) version is Google AI. Just feed a pdf to it. I attach Colm's original paper if you wish to test it on it which is what this thread was attempting to do. Or choose your own inputs.I always suspected that a lot of this AI stuff was just hype...
Go for the audio output.
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Colm Fagan
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Hi @Duke.
I was bowled over by the podcast, which John Moran put together, using Google's NotebookLM.
I understand that the only inputs were my entry for the Institute and Faculty of Actuaries' Redington Pension Prize and an article for The Actuary magazine.
Here is the link to the podcast: https://notebooklm.google.com/notebook/066294b7-a726-4efd-acf1-62e37880abea/audio
It has some great insights and analogies. For example, it compared lifestyle investing, the default approach for the Irish scheme, to "hitting the brakes when you're about to reach the finish line".
I was particularly pleased with its analysis of my proposal to address the risk of outliving one's savings. I was very proud of my "Lifetime Income Fund" and "Longevity Protection Fund" proposals, but they've got very little attention up to now. I loved the line in the podcast: "Annuities? Most people I know, they try to avoid those like the plague"
I wasn't keen on the "Devil's Advocate" part of the podcast, but then I wouldn't!!! I'm biased! Others might consider it fair.
It got a few things wrong.
It thinks that implementing the smoothed approach will require a complete change of mindset. I don’t think that’s true. It will only apply for auto-enrolment. The rest of the financial world can continue broadly as it has up to now. However, I would love if it results in a complete change of mindset.
It also thinks that “pretty strict rules” will be required to prevent people from gaming the system. I think it forgets that AE already has many such rules, by its very nature. For example, contributions by workers and employers (and the state) are stated clearly. There is also a prohibition on withdrawing money pre-retirement. Post-retirement, there is a limit on how much can be taken in cash, the remainder as pension. I’m proposing only small changes to those rules. In some ways, what I’m proposing allows far more flexibility, especially post-retirement, than would be available for some pensioners, particularly if they’ve opted for an annuity.
It misinterpreted my proposal on how the smoothed approach might have broader applications, referring to “government managed funds”. I don’t know where it got that idea. What I actually suggested (in the last few paragraphs of the IFOA paper) was that retiring members of DB and DC schemes might be allowed to transfer the retirement fund into the smoothed fund (on a phased basis), where they would treated the same as retired members of the AE scheme.
The podcast ends with a clarion call to investors to stop focusing on short-term market values and to shift the emphasis instead to sustainable long-term growth, referring to the challenge of climate change, etc. It says that the stakes are too high to keep doing things the same old way. I’m more hard-nosed, but nevertheless I’m optimistic that moving to the smoothed approach (for AE) would help change mindsets. I like it as an aspiration!
I was bowled over by the podcast, which John Moran put together, using Google's NotebookLM.
I understand that the only inputs were my entry for the Institute and Faculty of Actuaries' Redington Pension Prize and an article for The Actuary magazine.
Here is the link to the podcast: https://notebooklm.google.com/notebook/066294b7-a726-4efd-acf1-62e37880abea/audio
It has some great insights and analogies. For example, it compared lifestyle investing, the default approach for the Irish scheme, to "hitting the brakes when you're about to reach the finish line".
I was particularly pleased with its analysis of my proposal to address the risk of outliving one's savings. I was very proud of my "Lifetime Income Fund" and "Longevity Protection Fund" proposals, but they've got very little attention up to now. I loved the line in the podcast: "Annuities? Most people I know, they try to avoid those like the plague"
I wasn't keen on the "Devil's Advocate" part of the podcast, but then I wouldn't!!! I'm biased! Others might consider it fair.
It got a few things wrong.
It thinks that implementing the smoothed approach will require a complete change of mindset. I don’t think that’s true. It will only apply for auto-enrolment. The rest of the financial world can continue broadly as it has up to now. However, I would love if it results in a complete change of mindset.
It also thinks that “pretty strict rules” will be required to prevent people from gaming the system. I think it forgets that AE already has many such rules, by its very nature. For example, contributions by workers and employers (and the state) are stated clearly. There is also a prohibition on withdrawing money pre-retirement. Post-retirement, there is a limit on how much can be taken in cash, the remainder as pension. I’m proposing only small changes to those rules. In some ways, what I’m proposing allows far more flexibility, especially post-retirement, than would be available for some pensioners, particularly if they’ve opted for an annuity.
It misinterpreted my proposal on how the smoothed approach might have broader applications, referring to “government managed funds”. I don’t know where it got that idea. What I actually suggested (in the last few paragraphs of the IFOA paper) was that retiring members of DB and DC schemes might be allowed to transfer the retirement fund into the smoothed fund (on a phased basis), where they would treated the same as retired members of the AE scheme.
The podcast ends with a clarion call to investors to stop focusing on short-term market values and to shift the emphasis instead to sustainable long-term growth, referring to the challenge of climate change, etc. It says that the stakes are too high to keep doing things the same old way. I’m more hard-nosed, but nevertheless I’m optimistic that moving to the smoothed approach (for AE) would help change mindsets. I like it as an aspiration!
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Colm Fagan
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Part of my amazement at the podcast was like how you might feel if you saw a dog speak: you’re not interested in what he has to say; it could be complete rubbish for all you care. In this case it’s not rubbish!
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