Wharton-SMU Research Center

In-House Seminar

Guest Speaker:

Professor Olivia S. Mitchell
The Wharton School, University of Pennsylvania

Topic:

Annuity Values in Defined Contribution Retirement Systems.

Chairman:

Leong Kwong Sin, Associate Professor of Accounting

Venue:

Conference Room
Singapore Management University
11 Evans Road, Singapore 259368

Date:

Monday, 12 March 2001, at 4.30 pm

Reservation:

This seminar is free. Places are limited. Please confirm your attendance by Friday, 9 March 2001, 12.00 noon with Ms. Lim Lih Yeng at lylim@smu.edu.sg or telephone: 822-0197.

About the seminar:

In this paper we derive and compare the value of life annuity products in an international context. Our specific goal is to assess the money’s worth and adverse selection impact of annuities in two countries – Singapore and Australia – that have mandatory DC-type retirement plans. This similarity in plan type is offset by differences in the two countries’ national retirement policies.  Our comparison therefore exploits the natural experiment in annuity pricing and purchase behaviour under alternative retirement regimes. The results show that after controlling on administrative loadings, there appear to be important differences in measured adverse selection across countries. Specifically, selection appears to be far stronger in the presence of a generous public benefit scheme that provides a first line of defence against the risk of old-age poverty.

About the speaker:

Professor Olivia S. Mitchell is the International Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, and the Executive Director, Pension Research Council at the Wharton School of the University of Pennsylvania.  She joined the Wharton faculty in 1993. Her previous appointments were with Harvard University and Cornell University.

Her research areas are in the economics of pensions; employee benefits, compensation; private and social insurance; risk and crisis management; health and retirement analysis and policy; labor and public economics; international social security and pensions.  Her current projects are in the economics of annuities; global social security and pension reform; retirement, wealth and health; public and private pensions.