Chapter

Money-Back Guarantees in Individual Pension Accounts: Evidence from the German Pension Reform

Olivia S. Mitchell and Kent Smetters

in The Pension Challenge

Published in print November 2003 | ISBN: 9780199266913
Published online August 2004 | e-ISBN: 9780191601323 | DOI: http://dx.doi.org/10.1093/0199266913.003.0009
 Money-Back Guarantees in Individual Pension Accounts: Evidence from the German Pension Reform

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This chapter examines Germany’s alternative system for retirement financing. The government offers significant tax relief for investment products that guarantee that the cash value of individual pension accounts at the end of the accumulation period will be at least as high as the nominal sum of the contributions. Various strategies aimed at combining potentially return-increasing properties of equity investment with the risk-reducing characteristics of bond investments are analysed.

Keywords: Germany; pension reform; individual pension accounts; money-back guarantees; bond investments; equity investments

Chapter.  11707 words.  Illustrated.

Subjects: Financial Markets

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