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Article
Publication date: 15 June 2021

Tomoki Kitamura and Kunio Nakashima

Deferred annuities, which offer longevity insurance with relatively low premiums, are a potential payout option in defined contribution (DC) pension plans in Japan. This…

Abstract

Purpose

Deferred annuities, which offer longevity insurance with relatively low premiums, are a potential payout option in defined contribution (DC) pension plans in Japan. This study aims to measure individual preferences for these annuities.

Design/methodology/approach

This study conducts stated choice experiments using an original internet survey. This methodology provides a decision-making scenario similar to that faced by individuals when making real retirement saving decisions. Subjective valuations of deferred, immediate and term annuities are compared.

Findings

This study finds that male individuals have an insignificant preference for deferred annuities – the benefits of which begin at an advanced age. On average, deferred annuities are considered a gamble, betting against life and individuals who are married and have higher financial assets tend to value them less.

Originality/value

While previous studies, based on theory and simulations, have found that deferred annuities should be included in individual retirement assets, this study examines annuity preferences from the demand side (i.e. DC plan participants) –an approach that has not been addressed in the literature.

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Article
Publication date: 17 April 2020

Tomoki Kitamura and Kunio Nakashima

The purpose of this study is to examine the potential and cost of policy incentives for individuals to defer public pension (social security) claims.

Abstract

Purpose

The purpose of this study is to examine the potential and cost of policy incentives for individuals to defer public pension (social security) claims.

Design/methodology/approach

Using Internet survey experiments, the impacts of introducing three potential policies to defer public pension claims are examined: (1) a tax incentive for private term pension premiums, (2) a tax incentive for private term pension benefits and (3) a tax disincentive for financial asset holdings. Effectiveness of information provision regarding projection of future financial assets is also examined.

Findings

Tax incentives have a certain impact on deferment of public pension claims. Among incentives, increase of benefits is the most effective one. Providing information regarding future financial assets reduces incentives.

Originality/value

This study is original in measuring cost for delaying public pension claims according to incentives and information provision.

Details

Review of Behavioral Finance, vol. 13 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

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Book part
Publication date: 16 January 2014

Tomoki Kitamura and Munenori Nakasato

Previous studies showed mixed results as to the cause of myopic loss aversion (MLA). This paper reexamines the main driver of MLA, considering two factors from previous…

Abstract

Purpose

Previous studies showed mixed results as to the cause of myopic loss aversion (MLA). This paper reexamines the main driver of MLA, considering two factors from previous studies and an additional factor.

Design/methodology/approach

Experimentally investigate whether flexibility of investment, frequency of information feedback, or timing of decision cause MLA.

Findings

Timing of decision and flexibility of investment explain most differences in subject behavior. Frequency of information feedback makes only a marginal contribution.

Originality/value of the paper

The differences in subject behavior can be interpreted by a shift in their reference points depending on the difference in flexibility of investment, frequency of information feedback, or timing of decision.

Details

Experiments in Financial Economics
Type: Book
ISBN: 978-1-78350-141-0

Keywords

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