Designing the Payout Phase of Pension Systems: Policy Issues, Constraints and Options

59 Pages Posted: 20 Apr 2016

See all articles by Roberto de Rezende Rocha

Roberto de Rezende Rocha

World Bank - Middle East & North Africa Region; National Bureau of Economic Research (NBER)

Dimitri Vittas

World Bank - Financial Sector Development

Date Written: May 1, 2010

Abstract

This paper examines the policy issues, constraints and options facing policymakers in promoting the development of sound markets for retirement products. It discusses the various risks faced by pensioners and the risk characteristics of alternative retirement products and also reviews the risks faced by providers of retirement products and the management and regulatory challenges of dealing with these risks. The paper focuses on policies that could be adopted by developing and transitioning countries where financial and insurance markets are not well developed. It argues for promoting an adequate level of annuitization but avoiding excessive annuitization. It also argues for favoring combinations of payout options, covering different products at a particular point in time as well as different payout options over time. The paper also discusses the choice between centralized and decentralized markets and highlights the basic elements of an effective regulation of risk management.

Keywords: Debt Markets, Pensions & Retirement Systems, Insurance & Risk Mitigation, Non Bank Financial Institutions, Emerging Markets

Suggested Citation

Rocha, Roberto de Rezende and Vittas, Dimitri, Designing the Payout Phase of Pension Systems: Policy Issues, Constraints and Options (May 1, 2010). World Bank Policy Research Working Paper No. 5289. Available at SSRN: https://ssrn.com/abstract=1601130

Roberto de Rezende Rocha (Contact Author)

World Bank - Middle East & North Africa Region ( email )

1818 H Street N.W
Washington, DC 20433
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dimitri Vittas

World Bank - Financial Sector Development ( email )

Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/wbi/banking/insurance/contractual/vittas.html

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