1887

OECD Working Papers on Insurance and Private Pensions

Selected studies on insurance and private pensions policy prepared for use within the OECD and addressing such policy issues as risk management, governance, types of investments, and benefit protection. This working papers series has been discontinued; it is superseded by ‘OECD Working Papers on Finance, Insurance and Private Pensions’ available via: http://dx.doi.org/10.1787/20797117.

English

Forms of Benefit Payment at Retirement

This paper focuses on describing the international practice on the various forms of retirement benefit payment currently allowed in countries throughout the world and the regulatory environment surrounding these different forms of benefit payment. The analysis suggests considerable variance between countries. Some countries only allow one form of retirement payment, while others allow several forms or even a combination of them. Examining country practices as regard the providers of benefit payments, suggest that lump-sums and programmed withdrawals are generally provided by pension funds; while, as regard life annuities, providers varied from insurance companies, to pension funds, financial intermediaries and a centralised annuity fund. The paper ends by examining the role of taxation where a choice between different types of benefit payments is allowed. Tax provision plays a key direct or indirect role in influencing payout options. Cross country evidence is varied but suggests that there is often an unequal tax treatment of the various forms of retirement payout options.

English

Keywords: insurance companies, programmed withdrawal, financial intermediaries, centralized annuity fund, life annuities, pension fund, benefit payments at retirement, taxation, lump-sums, regulatory environment
JEL: D91: Microeconomics / Micro-Based Behavioral Economics / Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making; G11: Financial Economics / General Financial Markets / Portfolio Choice; Investment Decisions; J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; D14: Microeconomics / Household Behavior and Family Economics / Household Saving; Personal Finance; E21: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption; Saving; Wealth; J26: Labor and Demographic Economics / Demand and Supply of Labor / Retirement; Retirement Policies; G38: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: Government Policy and Regulation
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