SUBOPTIMALITY OF IMMEDIATE ANNUITIZATION IN PRIVATE PENSION SCHEMES

• Authors: Ján Šebo , Ľubica Šebová
• Languages of publication: EN

Abstracts

EN

Immediate annuitization as a strategy for a welfare maximization for a pay-out phase in private pension schemes has been widely criticized. We examine the self-annuitization strategies under two different consumption rates using programmed withdrawal compared to the immediate annuitization for a retired individual subject to uncertain portfolio returns and longevity risk. The aim is to examine the utility of both approaches under the existence of longevity risk on one side and bequest on the other. The results could serve as a basis for further discussion on improving the legislature on pay-out phase in Slovak private DC pension pillar.

Keywords

EN

ANNUITY; PROGRAMMED WITHDRAWAL; PRIVATE DC PENSION; SLOVAKIA; PENSION

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2016
• Volume: 64
• Issue: 2
• Pages: 169 – 190

Contributors

author

Ján Šebo

• Matej Bel University in Banská Bystrica, Faculty of Economics, Department of Public Economics and Regional Development, Tajovského 10, 975 90 Banská Bystrica, Slovak Republic

author

Ľubica Šebová