For years you deny it, then you doubt it, then you know for sure:



This blog is specially written for (1) those who are still in the denial phase and (2) 'actuarial life gamers' who just want to enjoy actuarial gaming....

Pension Game
Games are an excellent way to involve people (employees) in a complex and (two fold)  'low interest product' like pension.

Pension games stimulate clear communication and understanding of pensions (The Nest Phrasebook:Clear communication about pensions Version 1.1).

Games, like the above pension game, conquer the world more and more.

Gamification
It looks like everything that has to be sold or communicated, succeeds better with the help of a game. Gamification gets people more engaged, helps change behaviors and stimulates innovation. In other words:


As an example of gamification, Gartner cited the U.K.’s Department for Work and Pensions, which created an innovation game called Idea Street to decentralize innovation and generate ideas from its 120,000 people across the organization. Idea Street is a social collaboration platform with the addition of game mechanics, including points, leaderboards and a “buzz index.”

The employees went wild for it. Within 18 months, Idea Street had approximately 4,500 users and had generated 1,400 ideas, 63 of which had gone forward to implementation.

Other gamification examples are the U.S. military’s “America’s Army” video-game recruiting tool, and the World Bank-sponsored Evoke game, which crowdsources ideas from players globally to solve social challenges.

All and more of this in the 2011 report of  Gartner that states that by 2015, more than 50% of organizations tat manage innovation processes will gamify those processes.

Consequences
Mainly as a consequence of the overdose of gamification in our society, people get confused and lose sight on the difference between reality and illusion. 

This confusion is exacerbated by the fact that negative effects of the current financial crisis have been 'managed away' in stead of letting people and organizations 'perceive' and 'experience' the (negative) financial consequences of their handling.



This way, we gradually created a 'Hocus Pocus Society' where all our (actuarial) models and convictions are doomed to fail as the 'game of life' seems to be to:

• challenge the established (good governance) rules to raise profit and returns to an unrealistic level, by introducing uncontrolled and uncontrollable mechanisms and financial instruments like 'market value', 'derivatives', 'sub-prime mortgages', 'High Frequency Trading', etc.
• try - at the same time - to capture and control these volatile 'unwanted' effects of these mechanisms and instruments by an overdose of hypocritical additional regulation (Solvency (II), Governance, etc.)
• transfer and lay back fundamental complex risk to consumers and communicating this in such a (so called) 'transparent' but oversimplified 'way', that consumers for sure lose their trust in financial institutions as a whole.
• end up in new, for the financial institutions, 99,9% risk free financial products and offerings on the marketplace with a non corresponding stock holders dividend level.

This illusory way of communication about pensions is well demonstrated in the next 'Pension game' video: The myth of your (401K) pension





Way out
To get out of this down spiral cycle in the fiancial industry, we'll have to learn from other industries.

Just like in the case of introducing new medicines , new financial products will have to meet a number of tests and need explicit approval by in and external regulators before they are allowed to be  introduced on the market place.

Anyhow: Don't end up like a 'Hocus Pocus Actuary' and game up your actuarial life!



Related and additional links:
- Idea Street
- Gartner: Over 50% firms may gamify processes 
- Youtube: The Pension Game
- The Annuity Game - Heads Government Wins Tails Pensioner's Lose
- 5 Cent "Old Age Pension" Dice Game 


Calculators:
- life expectancy calculator
- Retirement Withdrawal Calculator