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This paper aims to explore the challenges facing the development of a takāful retirement annuity plan in Malaysia. It also aims at exploring a new platform to re-launch the same product after being withdrawn from the Malaysian annuity market a few years ago.

The research adopts a qualitative approach to address the possible challenges hindering the development of a takāful retirement annuity plan in Malaysia. The research will not discuss the Sharīʿah issues deemed settled in previous researches but will only focus on technical challenges related to the instruments of investment and prudential measures.

The research found that various challenges face the development of a takāful annuity plan in Malaysia. Some of those challenges are the downsizing of the ṣukūk market, the shortage of long-term ṣukūk, longevity risk and risk-based capitalization. The research found that there is a need for a diversified portfolio of securities instead of solely using ṣukūk as an investment instrument in this product.

Re-launching the takāful annuity plan in Malaysia requires the identification of actual challenges facing the development of such a product. The product purported to be re-launched would benefit a large segment of retirees who do not have enough savings during the retirement age. The introduction of such a product will also expand the takāful market in annuities, which remains untapped.

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.

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.

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.

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.

The purpose of this paper is to compare simple dynamic withdrawal strategies with the static withdrawal method, examining not only failure rates and ending wealth but also spending. All withdrawal strategies are adjusted for the Internal Revenue Service’s (IRS) required minimum distribution (RMD). In addition, this study investigates the use of small company stocks (SCS) in place of large company stocks (LCS). Results indicate SCS portfolios are superior to large. When returns are poor, some dynamic strategies will not ensure income for life. This study demonstrates that the simplest dynamic strategy is superior to two popular dynamic strategies.

Using historical overlapping periods, different withdrawal strategies are examined. Previous studies focused on failure rates and ending wealth. As discussed in Milevsky (2016) different statistical distributions can have similar tail properties (prob of failure) but dissimilar risk and return profile. The detailed examination of both spending and use of small stocks advances the literature in this area.

Results indicate that use of small stocks is superior to using large stocks in the portfolios. When US historical stock returns are adjusted downward, there is the potential that some dynamic strategies will not ensure income for life. This study demonstrates that the simplest dynamic strategy is superior to two popular dynamic strategies.

This paper is the first to examine, in detail, annual spending results for the retiree. Second, it is shown that, overall, SCS are superior to LCS for all stock/bond allocations. Even though absolute downside risk increases slightly, this increase in downside risk is dominated by the upside potential. In other words, the positive skewness of small stock returns along with the cumulative effects of compounding at a higher rate increases both the available wealth for spending and ending wealth. Third, IRS’s RMDs are taken into account for every withdrawal strategy examined. Lastly, it demonstrates that the simplest dynamic strategy is superior to two popular dynamic strategies.

The purpose of this study is to understand how risk attitudes drive demand for different types of insurance amongst Ghanaians.

This study uses data from a nationally representative survey of Ghanaian households (Ghana Living Standards Survey Round 7). Risk aversion is measured following the approach of Holt and Laury (2002) in the use of hypothetical questions about investment. Probit regressions are used to estimate the effect of risk aversion on insurance outcomes.

The paper finds evidence that supports the theory that risk attitudes influence insurance demand. Specifically, risk aversion is positively related to the uptake of insurance in general and in particular, public health insurance. Unlike previous literature, the authors do not find the sex of the respondent to affect the relationship between risk aversion and insurance demand except for private health insurance. Socio-economic factors such as wealth, age and education were found to strongly predict insurance demand.

The findings confirm that risk attitude influence the demand for insurance in developing countries but socio-economic factors play a strong role in explaining low insurance penetration in such contexts.

Theoretically, attitudes towards risk have been strongly linked with insurance demand. Yet, empirical evidence on this relationship is limited in developing countries where insurance penetration is very low. This study is among the first to document the influence of risk attitude on the demand of a range of insurance products using a large nationally representative sample of individuals in a developing country.

Although annuitization provides insurance against longevity risk that can benefit households, researchers have uncovered an annuitization puzzle, which suggests households are reluctant to annuitize their wealth. This study contributes to the discussions on the annuitization puzzle by examining investor sophistication and owning annuities in non-retirement accounts.

The study utilizes data from the 2018 U S National Financial Capability Study (NFCS). The empirical analyses are based on logistic regression estimates of annuity ownership on investor sophistication. Interpretations are based on odds ratios.

The findings indicate that investor sophistication contributes to the annuity puzzle. Investors with low objective and high subjective investment knowledge (overconfident investors) are more likely to own annuities compared to those with low objective and low subjective investment knowledge. However, investors with high objective and low subjective investment knowledge (under-confident investors) are less likely to choose annuity ownership compared to those with low objective and low subjective investment knowledge. The findings and ensuing discussion highlight the importance of annuitization when planning for retirement, with implications for financial service professionals.

The measure of investor sophistication does not assess the difficulty level of each financial knowledge question. The questions used to construct the investor sophistication variable are based on general investment knowledge. In addition, the annuity ownership variable used in this study pertains to investments outside retirement accounts. Despite these limitations, the findings highlight the importance of annuitization when planning for retirement.

Unlike prior studies, the authors consider four mutually exclusive measures of investor sophistication constructed from measures of objective and subjective investment knowledge to understand the effect of investor sophistication on annuity ownership in the United States.

This paper examines the perception and expectations of banking customers regarding the value being delivered to them by retail banks in South Africa. A literature review dealing with the concept of value was undertaken that presents the value disciplines of operational excellence, product leadership and customer intimacy. Results of a study of 150 managers are presented. The results show that customers were not satisfied with the service, products and level of customer intimacy delivered to them by their banks. Thus, they did not believe that they were getting the value they expected. Recommendations to retail banking management are made to help remedy the situation.

Using data from the Health and Retirement Study, we examine behavioral responses to a new generation of retirement policies that on average are actuarially neutral. Although many conventional models predict that actuarially neutral policies will not affect retirement behavior, our model allows those with high-time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits. Thus together with liquidity constraints facing those with high-time preference, we find that actuarially neutral policies do affect retirement behavior. One such policy follows on the elimination of the Social Security earnings test for those over normal retirement age, and would eliminate the earnings test between early and normal retirement age. Another of these policies would increase the ages of benefit entitlement. Still another such policy emerges from a central focus of the past few years on the adoption of personal accounts. Although Social Security benefits are currently paid in the form of an annuity, benefits from either defined benefit plans or from personal accounts may be made available as an annuity or as a lump sum of equivalent actuarial value. A related policy choice between actuarially equivalent benefits emerges on the pension side. There has been discussion of relaxing the current IRS prohibition against paying a pension benefit when a person remains at work, instead allowing partial pension benefits to be paid to those who partially retire on a job.

Using UK survey data on labour force participation and earnings and a model developed by the Department for Work and Pensions, I describe the unique challenges women face in accruing private pension benefits and simulate likely outcomes for women under the Government's proposed system of personal accounts. Projections of savings in personal accounts for male and female full-time median earners with the same work histories reveal that women would have about 27 per cent less savings available for retirement due to their lower earnings. This gap would grow, to 31 per cent, upon annuititization because single-sex annuity rates are used. Additional modifications that take into account typical work patterns of women, such as extended periods of part-time work, further reduce the savings they would accumulate in personal accounts. Several key policy provisions could improve outcomes for women including allowing spousal contributions and requiring joint-life or unisex annuities.

The purpose of this paper is to explain how the current “crisis” in the UK pension system arose. I argue that it is a result of a combination of changes in government policy and basic instabilities always inherent in the financial system. Policy changes increased the vulnerability of the pension system to those instabilities. The background to these changes and also the frame of reference in terms of which the “crisis” itself is now phrased is broadly neoliberal. Its theoretical roots are in ideas of the efficiency of free markets. Its policy roots are expressed in a series of similar neoliberal policy tendencies in other capitalist states. I further argue that neoliberal solutions to the pension crisis simply offer more of the very matters that created the problems in the first place. Moreover, the very terms of debate, based in markets, financialisation of saving and individualisation of risk, disguise a more basic debate about providing a living retirement income for all. This is a debate that New Labour is simply not prepared to constructively engage with in any concrete fashion.