Annuity Pricing in Public Pension Plans: Importance of Interest Rates

Nino Abashidze, Robert L. Clark, Beth Ritter and David Vanderweide

No 25343, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of these plans and how the monthly benefits for these distribution options are priced. The analysis shows that interest rates used to price annuities vary considerably across the plans. As a result, retirees with the same monthly benefit if a single life benefit is chosen will have substantially different monthly benefits if they select the joint and survivor annuity offered by their retirement plan.

JEL-codes: H7 J26 J45 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-age and nep-lma
Note: AG
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Nino Abashidze & Robert L. Clark & Robert G. Hammond & Beth M. Ritter & David Vanderweide, 2021. "Annuity pricing in public pension plans: importance of interest rates," Journal of Pension Economics and Finance, vol 20(1), pages 27-48.

Downloads: (external link)
http://www.nber.org/papers/w25343.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25343

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25343

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().