Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26256
Authors: 
Kifmann, Mathias
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2211
Abstract: 
This paper examines the optimal design of pension plans when the health status during retirement is uncertain. Assuming that the health status affects both life expectancy and the marginal utility of consumption, choice between a lump-sum payment and an annuity can be welfare-enhancing if the health status is not observable by pension plans. This result holds if the marginal utility of consumption and life expectancy are negatively correlated. On equity grounds, a lump-sum option can be justified even if the marginal utility of consumption is independent of life expectancy.
Subjects: 
pensions
lump-sum withdrawal
annuities
longevity
JEL: 
G23
H55
D82
Document Type: 
Working Paper

Files in This Item:
File
Size
238.49 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.