Longevity Risk Management in Singapore’s National Pension System
Joelle HY. Fong
University of New South Wales (UNSW) - Centre of Excellence in Population Ageing Research
Olivia S. Mitchell
University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)
Benedict S. Koh
Singapore Management University - School of Business
July 24, 2010
Pension Research Council WP 2010-10
Although annuities are a theoretically appealing way to manage longevity risk, in the real world relatively few consumers purchase them at retirement. To counteract the possibility of retirees outliving their assets, Singapore’s Central Provident Fund, a national defined contribution pension scheme, has recently mandated annuitization of workers’ retirement assets. More significantly, the government has entered the insurance market as a public-sector provider for such annuities. This paper evaluates the money’s worth of life annuities and discusses the impact of the government mandate and its role as an annuity provider on the insurance market.
Number of Pages in PDF File: 31
Keywords: annuity, singapore, mortality, payouts, adverse selection, population, insurance, premium, retireesworking papers series
Date posted: September 18, 2010 ; Last revised: November 26, 2011
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