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 This working papers series has been discontinued; it is superseded by ‘OECD Working Papers on Finance, Insurance and Private Pensions’ available via: http://dx.doi.org/10.1787/20797117.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

Policy Options for the Payout Phase

This paper assesses how countries‘ pension arrangements and regulation shape the appropriate structure and flexibility of retirement payout options. The paper aims at providing a guide to policy makers on how to address the diverse questions posed when designing the payout phase or promoting DC pension arrangements, as well as encouraging a market for annuities. The paper addresses questions concerning the type of retirement payout options for accumulated assets in DC plans a country should allow, which entities should provide annuities, and the type of annuity products that could be allowed. The main recommendation is for policy makers to consider mandating deferred life annuities that start paying at very old ages (e.g. at age 85) and allow for the remaining assets accumulated in DC accounts to be allocated as programmed withdrawals (preferably with flexibility to face contingencies).

English

Keywords: annuities, retirement income, programmed withdrawal, annuity providers, deferred life annuities, lump-sums, insurance companies, annuity markets, longevity risk
JEL: G38: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: Government Policy and Regulation; J26: Labor and Demographic Economics / Demand and Supply of Labor / Retirement; Retirement Policies; G11: Financial Economics / General Financial Markets / Portfolio Choice; Investment Decisions; E21: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption; Saving; Wealth; D11: Microeconomics / Household Behavior and Family Economics / Consumer Economics: Theory; D14: Microeconomics / Household Behavior and Family Economics / Household Saving; Personal Finance; D91: Microeconomics / Micro-Based Behavioral Economics / Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making; J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
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