Annuities and their Derivatives: The Recent Canadian Experience

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Wharton Pension Research Council Working Papers
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Economics
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Milevsky, Moshe A
Shao, Ling-wu
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This chapter surveys recent developments within the Canadian “income annuity” marketplace. We start by computing the Money’s Worth Ratio (MWR) using a unique dataset which includes a decade of Canadian annuity payouts. We then move-on to discuss the Guaranteed Lifetime Withdrawal Benefit (GLWB) product which has recently become available in Canada. This important innovation is extremely popular and shares many characteristics with a conventional income annuity. Finally, we conclude with thoughts on the optimal product allocation within the context of the Canadian retirement portfolio.

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2010-09-01
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The published version of this Working Paper may be found in the 2011 publication: Securing Lifelong Retirement Income (http://pensionresearchcouncil.wharton.upenn.edu/publications/books/securing-lifelong-retirement-income/)
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