IMF Working Papers

Self-insurance Against Natural Disasters: The Use of Pension Funds in Pacific Island Countries

By Si Guo, Futoshi Narita

July 6, 2018

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Si Guo, and Futoshi Narita. Self-insurance Against Natural Disasters: The Use of Pension Funds in Pacific Island Countries, (USA: International Monetary Fund, 2018) accessed September 18, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Pacific island countries are exposed to significant risks from natural disasters. As a disaster relief measure, Fiji allowed pre-retirement pension withdrawls in the wake of Cyclone Winston in 2016. Motivated by this policy action, we provide a normative analysis of the use of early pension withdrawals after disasters, by setting up a life-cycle saving model with myopic households facing large natural disaster shocks. The model demonstrates the key trade-off between building up sufficient retirement savings and ensuring the access to savings against natural disaster shocks, and sheds light on welfare implications of early pension withdrawals.

Subject: Consumption, Environment, Expenditure, Labor, National accounts, Natural disasters, Pension spending, Pensions, Retirement

Keywords: Amount, Consumption, Contribution rate, Fiji, Insurance, Life-cycle model, Natural disasters, One-off withdrawals assistance, Pacific Islands, Payment calculation, Pension, Pension saving, Pension savings, Pension spending, Pension withdrawals assistance, Pensions, Retirement, Saving, Saving path, Small states, Withdrawal, Withdrawal policy, WP

Publication Details

  • Pages:

    22

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/155

  • Stock No:

    WPIEA2018155

  • ISBN:

    9781484366837

  • ISSN:

    1018-5941