A Conceptual Framework for Retirement Products: Risk Sharing Arrangements Between Providers and Retirees
Voluntary annuity markets are, in most countries, smaller than what the theoretical and part of the empirical literature would suggest. There are both demand and supply constraints that hamper the development of annuity markets. In particular, trad...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/02/3911875/conceptual-framework-retirement-products-risk-sharing-arrangements-between-providers-retirees http://hdl.handle.net/10986/14315 |
| Summary: | Voluntary annuity markets are, in most
countries, smaller than what the theoretical and part of the
empirical literature would suggest. There are both demand
and supply constraints that hamper the development of
annuity markets. In particular, traditional products
available in most countries can require excessive minimum
capital requirements for given investment opportunities
available to providers. Investment and longevity risk should
be shared between providers and annuitants so that supply
constraints can be relaxed. Alternative annuity products,
which imply risk sharing, could be backed by substantially
lower capital investments or, equivalently, provided at
substantially lower prices to consumers. |
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