We develop an equilibrium theory of employer-sponsored retirement plan design using a behavioral contract theory approach. The operation of the labor market results in retirement plans that generally cater to, rather than correct, workers' mistakes. Our theory provides new explanations for a...

We study the extent to which retired households in Finland could supplement their mandatory pension benefits by releasing their equity. We also consider the tax treatment of different financial products that turn wealth into an income stream. In addition, we use a life cycle consumption-savings...

Longevity risk affecting older adults can be transferred to the insurance market by purchasing a lifetime annuity. Special-rate life annuities, which are priced, among other factors, on the basis of health and lifestyle factors, go beyond traditional considerations of age and sex by using...

Most defined contribution pension plans pay benefits as lump sums, yet the US Treasury has recently encouraged firms to protect retirees from outliving their assets by converting a portion of their plan balances into longevity income annuities (LIA). These are deferred annuities which initiate...

The changing social, financial and regulatory frameworks, such as an increasingly aging society, the current low interest rate environment, as well as the implementation of Solvency II, lead to the search for new product forms for private pension provision. In order to address the various...

A recent US Treasury regulation allowed deferred longevity income annuities to be included in pension plan menus as a default payout solution, yet little research has investigated whether more people should convert some of the $15 trillion they hold in employer-based defined contribution plans...

We derive an expression for the lifetime ruin probability (LRP), defined as the probability a fixed consumption plan will deplete an investment portfolio prior to a retiree's stochastic time of death, assuming the investment return driving the portfolio obeys a jump-diffusion process. This is in...

Inflation for retirees is different from, and mostly higher than, the macroeconomic (average) inflation rate for the entire population. In the U.S. for example, the Consumer Price Index for the Urban population (CPI-U) calculated and reported by the Bureau of Labor Statistics (BLS) has a lesser...

Some computational aspects of pension plans are discussed in the paper with applications for the pension system in the Czech Republic: (i) the gender problem for the pensions; (ii) the generation Life Tables; (iii) the problem of sustainability of the pensions in the Czech Republic. These...

This paper considers the design of pooled life annuities for Australian retirees. In particular it considers how mortality can be pooled, and investment returns smoothed, to provide for consumption that is greater and smoother – without the risk of totally exhausting account balances, and...