Annuities

OECD is undertaking a review of individual and group annuities market in member countries and their regulatory and supervisory framework. This market is likely to become increasingly important in the future as some countries are experiencing a trend away from defined benefit towards defined contribution pension plans.

Some important issues to be covered include:

• the pros and cons of mandatory annuitisation;
• adverse selection in annuities markets;
• the use of minimum worth ratios and other technical tools to estimate the value for money of annuities;
• the cost of annuities and their dependence on investment risk, maturity matching and administrative efficiency;
• the supply of inflation-indexed bonds and the market for indexed annuities.

Documentation

• Annuity Margins in the UK , by Mamta Murthi, Michael Orszag and Peter Orszag
• Private Annuities in OECD Countries