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Unisex life care annuities embedded in a pay-as-you-go pension system: Analysing the issue of gender redistribution

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Vidal-Meliá, Carlos and Ventura-Marco, Manuel and Pla-Porcel, Javier (2018) Unisex life care annuities embedded in a pay-as-you-go pension system: Analysing the issue of gender redistribution. Journal of Population Ageing . pp. 1-22. ISSN 1874-7876

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Official URL: https://doi.org/10.1007/s12062-018-9229-3



Abstract

This paper deals with the idea of converting retirement benefit into a life care annuity with graded benefits using a pre-existing public pay-as-you-go pension scheme. Based on accurate biometric data from Australia and the US, the paper shows that using gender-neutral annuity factors to compute the initial benefit involves a large increase in ex-ante gender redistribution compared to a system without long-term coverage. In spite of the very different biometric data, the results are surprisingly similar for both countries. To disentangle the hidden redistribution, a methodology based on conversion (actuarial) factors is used. The value of the actuarial factor relies on a multistate framework in which transitions are modeled from the initial health state to the absorbing state. We also look at what might happen if an annuitant’s initial heath state is not able when they become a beneficiary.


Item Type:Article
Uncontrolled Keywords:Gender; Life care annuities; Long-term care insurance; Redistribution; Retirement
Subjects:Social sciences > Economics > Public economy
Social sciences > Economics > Insurance
JEL:H55, J26, G22, I13, J14
ID Code:55530
Deposited On:31 May 2019 12:26
Last Modified:03 Jun 2019 07:26

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