Completing the Pensions Task: Infrastructure for Nationally Coordinated Private Schemes
Journal of Economic and Social Policy, Vol. 13, No. 1, 2009
11 Pages Posted: 6 Oct 2010
State-sponsored private pension schemes generally provide retirees with a lump sum, but do nothing to assist them with its conversion to an income stream. An optimal way to affect this conversion is to purchase a guaranteed term-certain annuity with part of the sum, while investing the remainder in a national bourse index fund. At present annuities must be purchased from commercial providers. If Government were to issue part of its public debt in the form of annuity bonds, retirees could purchase riskless annuities at lower cost, with government being involved in the pension scheme throughout all phases.
Keywords: lump sum conversion, retirement incomes, government annuity bonds
JEL Classification: C00, E00, K00, K19, K22, H55
Suggested Citation: Suggested Citation