Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
970351 | Journal of Public Economics | 2006 | 15 Pages |
Abstract
Most pension plans allow a lump sum distribution upon job separation, enabling a subsequent cash-out. In the 1992–2000 HRS, 13% of entitlements were cashed-out, representing 5.3% of entitlement dollars. Among plans with a lump sum option, 20% were cashed out. Cash-outs can be rational and we broadly confirm hypotheses for cash-out determinants, but not that individuals with short expected longevity should wish to disproportionately cash out. Fears of adverse selection into the pool of pensioners with annuity income thus appear unfounded. While we find only limited leakage, it is concentrated among individuals vulnerable to poverty in old age.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Michael Hurd, Constantijn Panis,