Alternative Pension Products for Longevity Risk
Countries around the world have overhauled their retirement-savings markets in recent years with the changes in Israel among the most dramatic. The main change for Israeli savers is the transition from the old Defined Benefits pension funds (DB) to new Defined Contribution pension funds (DC). Because the change is relatively new, systems have not reached equilibrium so there is no consensus on how to build a sustainable system for retirement security.
This research examines the needs and risks associated with the benefits-withdrawal phase of the new DC plans, including products for individuals with low-life expectancy, insurance coverage, financial solutions to improve yields, and stability. It also addresses the importance of financial education. It does not focus on the asset-accumulation phase of the plans.