Regulation of Withdrawals in Individual Account Systems
IMF Working Papers, November 1, 1999
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- Regulation of Withdrawals in Individual Account Systems
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Bibliographic details
- Authors: Jan Walliser
- Published: November 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451857139.001
Summary and key findings
- Funded mandatory pension systems based on individual accounts are spreading around the world.
- As these systems mature, regulation of the withdrawal of retirement savings will become increasingly important.
- Government regulation of withdrawals should mandate the purchase of inflation-indexed life annuities exceeding income available from government welfare programs for the retiree and potential survivors.
- Proper functioning of insurance markets does not require annuitizing the entire account balance.
- Flexibility for the choice of withdrawals could be permitted for any remaining funds, helping to tailor income streams to individual needs and living arrangements.
Policy recommendations
- Mandate purchase of inflation-indexed life annuities that provide income above government welfare program levels for retirees and potential survivors.
- Allow partial annuitization: require sufficient annuitization to secure basic retirement income while permitting discretionary withdrawal options for residual account balances.
- Design withdrawal regulations to balance insurance market functioning with individual tailoring of income streams to household needs and living arrangements.
Scope and thematic coverage
- Subjects: Aging, Financial institutions, Income, Insurance, Labor, National accounts, Pensions, Population and demographics, Retirement.
- Keywords: Aging, annuities market, annuity, annuity company, annuity insurance markets well, Eastern Europe, family annuity contract, Income, individual accounts, Insurance, investment portfolio, pension reform, Pensions, refund annuity, Retirement, WP.
Regulation of Withdrawals in Individual Account Systems — Jan Walliser, November 1, 1999 (IMF Working Papers 1999/153).
Content in this bundle
- Regulation of Withdrawals in Individual Account Systems - WP/99/153