A summary and update of developing annuities markets : the experience of Chile
The rapid growth of the market for retirement products in Chile has its origins in the pension reform that was implemented in 1981. But the successful development of an active annuity market also reflects many other factors. This paper summarizes and updates an earlier longer study on the development of the Chilean annuity market. The update focuses on the numerous changes that were introduced in 2008. The most striking aspect of the Chilean experience is the very high rate of annuitization. This has been linked to the restrictions that have been applied to lump-sum withdrawals, the offer of inflation-protected annuities, and the robust prudential regulation of providers. But the level of annuitization has also been supported by the annuitization incentives provided to early retirees and the influence of brokers and sales agents. The recent regulatory changes have weakened the impact of the last two factors, while strengthening the demand for annuities at normal retirement.
|Date of creation:||01 Jun 2010|
|Date of revision:|
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- Jeffrey R. Brown & Olivia S. Mitchell & James M. Poterba, 1999.
"The Role of Real Annuities and Indexed Bonds in an Individual Accounts Retirement Program,"
Center for Financial Institutions Working Papers
99-18, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Jeffrey R. Brown & Olivia S. Mitchell & James M. Poterba, 2001. "The Role of Real Annuities and Indexed Bonds in an Individual Accounts Retirement Program," NBER Chapters, in: Risk Aspects of Investment-Based Social Security Reform, pages 321-370 National Bureau of Economic Research, Inc.
- Jeffrey R. Brown & Olivia S. Mitchell & James M. Poterba, . "The Role of Real Annuities and Indexed Bonds In An Individual Accounts Retirement Program," Pension Research Council Working Papers 99-2, Wharton School Pension Research Council, University of Pennsylvania.
- Jeffrey R. Brown & Olivia S. Mitchell & James M. Poterba, 1999. "The Role of Real Annuities and Indexed Bonds in an Individual Accounts Retirement Program," NBER Working Papers 7005, National Bureau of Economic Research, Inc.
- Walker, Eduardo, 2006. "Annuity markets in Chile : competition, regulation - and myopia ?," Policy Research Working Paper Series 3972, The World Bank.
- James, Estelle & Martinez, Guillermo & Iglesias, Augusto, 2006. "The payout stage in Chile: who annuitizes and why?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 5(02), pages 121-154, July.
- Roberto Rocha & Craig Thorburn, 2007. "Developing Annuities Markets : The Experience of Chile," World Bank Publications, The World Bank, number 7162.
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