Longevity Risk and Annuities in Singapore

Joelle H. Y. Fong, Olivia S. Mitchell and Benedict S. K. Koh

in Reorienting Retirement Risk Management

Published in print August 2010 | ISBN: 9780199592609
Published online September 2010 | e-ISBN: 9780191594618 | DOI:
Longevity Risk and Annuities in Singapore

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This chapter explores the current annuity market in Singapore in view of the plan to mandate annuitization under the Singaporean Central Provident Fund (CPF). The authors evaluate the pricing of various annuity policies in order to assess whether plan participants might benefit from higher annuity returns per dollar premium and lower adverse selection costs under the new annuitization mandate. Results indicate that private annuity providers currently offer good value‐for‐money annuities, with money's worth values in line with those found for other developed countries. This has implications for proposals to mandate annuitization.

Keywords: annuity; defined contribution; money's worth; adverse selection; retirement income

Chapter.  8074 words.  Illustrated.

Subjects: Pensions

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