The Geneva Association: Annuitisation as an Insurance Solution to People Outliving Their Retirement Savings
The risk of people outliving their retirement savings represents a threat to their standard of living, meaning many could lapse into poverty; however, the annuitisation of occupational pension assets represents an insurance solution to this societal issue, according to a study of
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The report 'Annuitisation: Retirement Income That Lasts a Lifetime' indicates that increased life expectancy, low fertility rates and low interest rates are putting extreme pressure on government-provided retirement plans, known as Pillar I, and are leading to a reduction of benefits for people going into retirement, who must increasingly deal with complex decisions about their occupational pension plans, known as Pillar II.
Anna Maria D'Hulster, Secretary General of
The report looks at the Pillar II programmes for the
The report recommends that the default options for Pillar II programmes should be based upon three principles: automatic enrolment of employees into an occupational pension plan, automatic escalation of contributions with age and duration of employment, and some level of mandatory annuitisation.
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