Longevity and Annuities: an Introduction
نویسنده
چکیده
For decades the debate on pensions has focused on the “accumulation phase” of the life-cycle. Many specific research topics have been explored as this literature has developed. However, they were all in one way or another concerned by the adequacy of saving. In other words, the main focus of the existing literature has been on the question of setting enough resources aside to keep the flow of consumption relatively stable after retirement. The main topics in this line have included the relative merits of pay-as-you go and funded pensions, the issue of early retirement in a world of increasing longevity and the threat of aging on the financial viability of pensions systems. It is only recently that some economists have started to be concerned by the “forgotten half” of retirement security: the “decumulation phase” (also called the “payout phase”). It is our belief that there both will and should be more research on this phase in the future. Why should there be such a change in emphasis? A cynical answer would be that so much has been written on the relative merits of PAYGO and fully funded pensions, on the issue of privatizations, on the need of fostering activity rates of elderly workers, and so on, that pension economists are forced to seek new and unplowed fields. This is a rather negative view. We also see at least three positive reasons to explain the surge of interest in the decumulation phase: the continuing shift from “defined benefits” to “defined contributions” pensions both in the public and in the private sector, the thinness of the annuity market, and the demographic changes. In countries like Germany or France, the main source of retirement income has for decades consisted of annuitized benefits from contributory pensions. In such a setting, one understands that the payout phase was not a big concern. The government provided a safe and adequate flow of resources
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