Longevity Risk Management in Singapore’s National Pension System

31 Pages Posted: 18 Sep 2010 Last revised: 13 Nov 2013

See all articles by Joelle H. Fong

Joelle H. Fong

National University of Singapore

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Benedict S. Koh

Singapore Management University - Lee Kong Chian School of Business

Date Written: July 24, 2010

Abstract

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.

Keywords: annuity, singapore, mortality, payouts, adverse selection, population, insurance, premium, retirees

Suggested Citation

Fong, Joelle H. and Mitchell, Olivia S. and Koh, Benedict S., Longevity Risk Management in Singapore’s National Pension System (July 24, 2010). Pension Research Council WP 2010-10, Available at SSRN: https://ssrn.com/abstract=1678079 or http://dx.doi.org/10.2139/ssrn.1678079

Joelle H. Fong

National University of Singapore ( email )

469C BUKIT TIMAH ROAD, LKYSPP
SINGAPORE, Singapore 259771
Singapore

HOME PAGE: http://https://lkyspp.nus.edu.sg/our-people/faculty/fong-hung-yee-joelle

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Benedict S. Koh

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

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