Wharton Pension Research Council Working Papers

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Working Paper

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When participants in a defined contribution (DC) pension plan retire, they face an important decision regarding how to spend their retirement assets. The distribution decisions they make at or near retirement can significantly affect both their retirement incomes and the benefits paid to survivors or heirs. Yet very little is known about how DC plan participants actually choose to receive distributions from their retirement assets, when a wide array of annuity options is made available to them. Using unique historical data from a major DC pension provider (TIAA-CREF), we document and discuss the income elections of participants over the period 1978-2001. We show that, following the introduction of non-annuity income options in 1988, there was a significant decline in the use of life-contingent immediate annuity income among those initiating periodic withdrawals from their retirement accounts. Differences in choices by option and accumulated asset amount are described by demographic characteristic. Patterns may have relevance to policymakers, as they continue to evaluate the role of DC pension systems and life annuities in the provision of retirement income.


The published version of this Working Paper may be found in the 2004 publication: Pension Design and Structure: New Lessons from Behavioral Finance.

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Copyright/Permission Statement

©2003 Pension Research Council of the Wharton School of the University of Pennsylvania. All Rights Reserved


The views expressed are solely those of the author, and do not necessarily represent the opinions of TIAA-CREF or any other members of its staff. The author is solely responsible for any errors.

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Economics Commons



Date Posted: 04 September 2019