Annuity Of Supply And Demand Of The Plight Of The Account Annuity

This paper mainly focuses on the relationship between funded pension account annuitization and commercial annuity market development under the background of the growing-up funded pension plans and the increasing longevity risks. To be specific, its analysis involve the characteristics of longevity risk, annuity insurance's value and the"annuity puzzle"in the market, the annnuitization policy of funded pension plans in various countries, and attempt to draw a conclusion of development experience of international annuity insurance market. This paper also reviews the status quo of commercial annuity market in China, rethinks the advice of favourable tax of individual annuity, chiefly explores the relationship between the individual account in basic pension system and commercial annuity insurance market.Annuity insurance, as form of longevity risk management mechanism, can create mortality premiums and give the life pension benefit which maximize the beneficiary's whole life consumption utility. However, there is annuity puzzle in voluntary annuity market because of the adverse select, the myopia or fluke psychology, the risks following the purchase of annuity insurance, bequeath utility, crowding-out effect, and the under-supply of products and etc. The annuity insurance market if with the support of annuitization policy will march further, which has lively been reflected by the international annuity insurance market experience. In China, the uncertainty surrounding the favorable tax policy to be put into place and the lack of the matching annuitization policy in the supplementary pension system, and the nonfeasibility of individual account in the basic pension system to be commercially annuitization now according to some advices, decide that our annuity insurance market would not follow the same growth path as in Britain, Chile, Switzerland and so no in the near future, so the market development prospect will still be uncertain in some extent. In a word, the growing path of annuity insurance market will mainly depend on how social pension insurance system continues to be reformed and regulated.