Annuities in (N)DC Pension Schemes: Design, Heterogeneity, and Estimation Issues

Edward Palmer and Yuwei Zhao de Gosson de Varennes

No 136562, Social Protection Discussion Papers and Notes from The World Bank

Abstract: This paper identifies and discusses four issues in creating annuities in (nonfinancial) defined contribution (NDC) schemes that are essential for systems? financial stability and fair inter or intragenerational redistribution. The first issue is the choice between incorporating the rate of return into the annuity or into the exogenous indexation. The second issue is in choosing a projection method for life expectancy that produces systematically unbiased estimates. The third issue is at what age the projection of life expectancy is to be fixed over the remaining lifetime of the annuity. The final issue is the prevalence of socioeconomic heterogeneity within the insurance pool.

Keywords: Population&Development; Law and Justice Institutions; Pensions&Retirement Systems; Gender and Development; Labor Markets (search for similar items in EconPapers)
Date: 2019-04-01
New Economics Papers: this item is included in nep-age
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:hdnspu:136562

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