Can the Private Annuity Market Provide Secure Retirement Income?

Author/Editor:

Allison C Schrager ; George A Mackenzie

Publication Date:

December 1, 2004

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Annuity premiums are often assumed to be constant, although they can be expected to vary with the yield curve. Variations in premiums will become an important public policy issue as defined-contribution (DC) pension plans play an increasingly prominent role in providing retirement income. As DC plan holders retire, many will annuitize at least a part of their account balances. In the absence of current data on annuity prices, the paper relies on U.S. Treasury interest rate data to simulate the impact of interest rate variation on annuity premiums. For a spectrum of feasible interest rates, the variation in retirement income is not negligible.

Series:

Working Paper No. 04/230

Subject:

English

Publication Date:

December 1, 2004

ISBN/ISSN:

9781451875539/1018-5941

Stock No:

WPIEA2302004

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

20

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