Article contents
Annuity pricing in public pension plans: importance of interest rates
Published online by Cambridge University Press: 13 November 2019
Abstract
This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. The interest rates used to price annuities vary considerably across the plans. As a result, retirees with the same monthly benefit if a single life benefit is chosen will have substantially different monthly benefits if they select a joint and survivor annuity. We examine the impact of variation in the pricing of annuity options using both cross-plan differences in interest rates and the change in the choice of annuity options in one plan after the price of options changes due to new assumed interest rates and mortality rates.
- Type
- Article
- Information
- Copyright
- Copyright © Cambridge University Press 2019
Footnotes
References
- 4
- Cited by