Annuity Values in Defined Contribution Retirement Systems: The Case of Singapore and Australia / Suzanne Doyle, Olivia S. Mitchell, John Piggott.

Format:

Book

Author/Creator:

Doyle, Suzanne.

Contributor:

National Bureau of Economic Research.

Mitchell, Olivia S.

Piggott, John.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8091.

NBER working paper series no. w8091

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Annuity Values in Defined Contribution Retirement Systems

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

In this paper we derive and compare the value of life annuity products in an international context. Our specific goal is to assess the money's worth and adverse selection impact of annuities in two countries Singapore and Australia that have mandatory DC-type retirement plans. This similarity in plan type is offset by differences in the two countries' national retirement policies. Our comparison therefore exploits the natural experiment in annuity pricing and purchase behaviour under alternative retirement regimes. The results show that after controlling on administrative loadings, there appear to be important differences in measured adverse selection across countries. Specifically, selection appears to be far stronger in the presence of a generous public benefit scheme that provides a first line of defence against the risk of old-age poverty.

Notes:

Print version record

January 2001.