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Abstract

Abstract: State-sponsored private pension schemes generally provide retirees with a lump sum, but do nothing to assist them with its conversion to an income stream. An optimal way to affect this conversion is to purchase a guaranteed term-certain annuity with part of the sum, while investing the remainder in a national bourse index fund. At present annuities must be purchased from commercial providers. If Government were to issue part of its public debt in the form of annuity bonds, retirees could purchase riskless annuities at lower cost, with government being involved in the pension scheme throughout all phases

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