Decentralized Annuity: A Quest for the Holy Grail of Lifetime Financial Security
Fuente:
arXiv
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| Autori principali: | , , |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866909502200086528 |
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| author | Runhuan, Feng Zongxia, Liang Yilun, Song |
| author_facet | Runhuan, Feng Zongxia, Liang Yilun, Song |
| contents | This paper presents a novel framework for decentralized annuities, aiming to address the limitations of traditional pension systems such as defined contribution (DC) and defined benefit (DB) plans, while providing lifetime financial support. It sheds light on often ignored pitfalls within current retirement schemes and introduces individual rationality properties. The research delves into various fairness concepts that underpin existing plans, emphasizing that decentralized annuities, while meeting similar fairness criteria, offer enhanced flexibility for individual rationality and improved social welfare for all participants. Using theoretical models and examples, we demonstrate the potential of decentralized annuities to outperform self-managed plans (DC) and to produce effects comparable to defined benefit (DB) plans, particularly within larger participant pools. The paper concludes by exploring the managerial implications of decentralized annuities and laying the groundwork for the further advancement of equitable and sustainable decentralized annuity systems. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2502_13742 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Decentralized Annuity: A Quest for the Holy Grail of Lifetime Financial Security Runhuan, Feng Zongxia, Liang Yilun, Song Mathematical Finance C61, D15, G11, G22 This paper presents a novel framework for decentralized annuities, aiming to address the limitations of traditional pension systems such as defined contribution (DC) and defined benefit (DB) plans, while providing lifetime financial support. It sheds light on often ignored pitfalls within current retirement schemes and introduces individual rationality properties. The research delves into various fairness concepts that underpin existing plans, emphasizing that decentralized annuities, while meeting similar fairness criteria, offer enhanced flexibility for individual rationality and improved social welfare for all participants. Using theoretical models and examples, we demonstrate the potential of decentralized annuities to outperform self-managed plans (DC) and to produce effects comparable to defined benefit (DB) plans, particularly within larger participant pools. The paper concludes by exploring the managerial implications of decentralized annuities and laying the groundwork for the further advancement of equitable and sustainable decentralized annuity systems. |
| title | Decentralized Annuity: A Quest for the Holy Grail of Lifetime Financial Security |
| topic | Mathematical Finance C61, D15, G11, G22 |
| url | https://arxiv.org/abs/2502.13742 |