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Contribution Pension Schemes (contribution + pension_scheme)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting80%

Selected Abstracts

On the Cost of Adverse Selection in Individual Annuity Markets: Evidence From Singapore

JOURNAL OF RISK AND INSURANCE, Issue 2 2002
Wai Mun Fong
New evidence is presented on the cost of adverse selection in individual annuity markets using Singapore data. The Singapore annuity market is an interesting setting to examine the cost of adverse selection for three reasons. First, unlike many Western countries, the Singapore government provides very limited public financial assistance for retirees. Second, while social security contributions mandated under the Central Provident Fund (CPF) result in a high forced savings rate, a large proportion of CPF savings, are used up for housing. Third, to ensure that retirees have sufficient funds to meet basic needs, individuals who reach age 55 are required to set aside a minimum amount of their CPF savings, which can be withdrawn at age 62. The CPF Board allows various options for investing the minimum sum, but the most attractive option is to purchase an annuity. The institutional setting in Singapore in effect provides insurers with a large captive market for annuities. It is conjectured that this should be reflected in a significantly lower cost of adverse selection for annuities sold in Singapore as compared with other countries. The results herein, using data for CPF-approved insurers, are strongly consistent with this conjecture. On average, money's worth of annuities is higher than annuities sold to a similar age-gender mix in the United States, United Kingdom, and Australia. Adverse selection accounts for less than 13 percent of the cost of longevity insurance compared to 30,50 per- cent documented in many previous studies. These results suggest that one way to resolve the adverse selection problem is to adopt a universal individual defined contribution pension scheme that mandates or provides strong incentives for retirees to purchase annuities. [source]

The tax treatment of UK defined contribution pension schemes

FISCAL STUDIES, Issue 1 2002
Philip Booth
Abstract The paper aims to clarify the tax status of pension schemes in the UK and, by using economic and other arguments, to establish a theoretical benchmark that could be considered the ,appropriate' tax regime for pension saving. We consider existing tax regimes for saving (such as the ,ISA' regime) and theoretical regimes (such as a pure expenditure tax and a comprehensive income tax) and we compare the costs different tax regimes impose on defined contribution pension schemes. We conclude that an expenditure tax is an appropriate benchmark tax regime for pension saving, and that other tax regimes impose additional financial as well as administrative costs. [source]

The recalibration of the Danish old-age pension system

INTERNATIONAL SOCIAL SECURITY REVIEW, Issue 2 2003
Niels Ploug
Pension reform in Denmark in the 1990s is of general interest owing to the development of a system of funded, defined contribution pension schemes based on collective agreement between the parties in the labour market. The resulting pension system seems to hold some answers to the critique of funded pension schemes. This paper analyses the process which led to the 1991 pension reform and relates the discussions and solutions found in Denmark to the international debate on pension reform. [source]

THEORETICAL FOUNDATIONS OF PAY-AS-YOU-GO DEFINED-CONTRIBUTION PENSION SCHEMES

METROECONOMICA, Issue 2 2008
Sandro Gronchi
ABSTRACT The paper inquires into notional defined contribution pension schemes, which retain the pay-as-you-go financing method while adopting the award and indexation formulas typical of funded, defined-contribution systems. It examines the properties of the new arrangement and compares them with those of the traditional defined-benefit pay-as-you-go schemes. [source]