Regulation of Withdrawals in Individual Account Systems

Author/Editor:

Jan Walliser

Publication Date:

November 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Funded mandatory pension systems based on individual accounts are spreading around the world. With the maturation of these systems, regulating the withdrawal of retirement savings will become increasingly important. Government regulation of withdrawals should mandate the purchase of inflation-indexed life annuities exceeding income available from government welfare programs for the retiree and potential survivors. Proper functioning of insurance markets does not, however, require annuitizing the entire account balance. Instead, more flexibility for the choice of withdrawals could be permitted for any remaining funds, helping to tailor income streams to individual needs and living arrangements.

Series:

Working Paper No. 1999/153

Subject:

Aging Financial institutions Income Insurance Labor National accounts Pensions Population and demographics Retirement

English

Publication Date:

November 1, 1999

ISBN/ISSN:

9781451857139/1018-5941

Stock No:

WPIEA1531999

Pages:

24

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