Wharton Pension Research Council Working Papers

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Working Paper

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Although annuities are a theoretically appealing way to manage longevity risk, in the real world relatively few consumers purchase them at retirement. To counteract the possibility of retirees outliving their assets, Singapore’s Central Provident Fund, a national defined contribution pension scheme, has recently mandated annuitization of workers’ retirement assets. More significantly, the government has entered the insurance market as a public-sector provider for such annuities. This paper evaluates the money’s worth of life annuities and discusses the impact of the government mandate and its role as an annuity provider on the insurance market.


Annuity, singapore, mortality, payouts, adverse selection, population, insurance, premium, retirees

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Copyright/Permission Statement

Opinions are solely those of the authors who acknowledge research support from the Wharton-SMU Research Center at Singapore Management University, and the National Institutes of Health (National Institute on Aging, Grant number P30 AG12836), the Boettner Center for Pensions and Retirement Security at the University of Pennsylvania, and National Institutes of Health (National Institute of Child Health and Development Population Research Infrastructure Program R24 HD-044964), all at the University of Pennsylvania © 2010 Fong, Mitchell, and Koh. All rights reserved.


The authors acknowledge helpful assistance and advice from Desmond Chew, Libby Sang, and Lee Ee Jia; we are especially grateful to Jean Lemaire for valuable insights.

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Economics Commons



Date Posted: 07 August 2019