The Mexican Pension Annuity Market
This paper analyzes the performance and development of the Mexican pension annuity market established as a consequence of the 1997 pension reform. The Mexican experience displays interesting characteristics providing lessons for other countries tha...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/05/7639190/mexican-pension-annuity-market http://hdl.handle.net/10986/7101 |
| Summary: | This paper analyzes the performance and
development of the Mexican pension annuity market
established as a consequence of the 1997 pension reform. The
Mexican experience displays interesting characteristics
providing lessons for other countries that still need to
design the decumulation phase of their newly established
second pillars. At the same, time it raises some technical
and policy concerns that need addressing as they could
hamper, in the future, the healthy development of the
market. The paper concludes that: 1) general life insurance
companies may better hedge longevity risk than specialized
annuity companies; 2) competition should be based on prices
rather than additional products; 3) better disclosure of
options under the 1973 and 1997 social security laws should
be given to disability and life annuitants; and 4) various
measures should be taken to improve asset liability
management including allowing companies to trade over the
counter derivatives and substituting over time the
regulatory asset liability management framework with an
economic asset liability management framework. |
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