The Pension Research Council
Working Paper

Longevity Risk and Annuities in Singapore

Joelle H.Y. Fong, Olivia S. Mitchell, and Benedict S. K. Koh
WP2009-20

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Abstract —

This chapter explores the current annuity market in Singapore and discusses the pros and cons of a proposal to mandate annuitization under the Singaporean Central Provident Fund (CPF). We evaluate the pricing of various annuity policies in order to assess whether plan participants might benefit from higher annuity returns per dollar premium and lower adverse selection costs under the new annuitization mandate. Our results indicate that private annuity providers currently offer good value-for-money annuities, with money’s worth values in line with those found for other developed countries. This has implications for proposals to mandate annuitization.