Designing the Payout Phase of Pension Systems : Policy Issues, Constraints and Options
This paper examines the policy issues, constraints and options facing policymakers in promoting the development of sound markets for retirement products. It discusses the various risks faced by pensioners and the risk characteristics of alternative retirement products and also reviews the risks faced by providers of retirement products and the management and regulatory challenges of dealing with these risks. The paper focuses on policies that could be adopted by developing and transitioning countries where financial and insurance markets are not well developed. It argues for promoting an adequate level of annuitization but avoiding excessive annuitization. It also argues for favoring combinations of payout options, covering different products at a particular point in time as well as different payout options over time. The paper also discusses the choice between centralized and decentralized markets and highlights the basic elements of an effective regulation of risk management.
Summary: | This paper examines the policy issues,
constraints and options facing policymakers in promoting the
development of sound markets for retirement products. It
discusses the various risks faced by pensioners and the risk
characteristics of alternative retirement products and also
reviews the risks faced by providers of retirement products
and the management and regulatory challenges of dealing with
these risks. The paper focuses on policies that could be
adopted by developing and transitioning countries where
financial and insurance markets are not well developed. It
argues for promoting an adequate level of annuitization but
avoiding excessive annuitization. It also argues for
favoring combinations of payout options, covering different
products at a particular point in time as well as different
payout options over time. The paper also discusses the
choice between centralized and decentralized markets and
highlights the basic elements of an effective regulation of
risk management. |
---|