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May 1, 2023

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OECD: Tontines offer advantages & they are coming soon

Tontines on the agenda at the Webinar by OECD and the Arab Pensions Conference to discuss the future of pensions as set out in the OECD Pensions Outlook Report.

Dean McClelland

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Tontines were on the agenda at the joint Webinar by OECD and the Arab Pensions Conference to discuss the future of pensions as set out in the OECD Pensions Outlook Report which is published every 2 years to guide pension policy makers at their 37 member states.

Chapter 6 of the 2020 report set out guidance notes in regards to the benefits of risk sharing tontines and tontine annuities for governments, issuers and retirees concluding that they "offer real benefits... even without an external guarantee from (an insurer). This means that all participants can increase their retirement income".

Crucially, Mr Antolin & his team have ratified our stance that tontine pensions should ensure absolute fairness and should be constructed to reduce or avoid the problems associated with other proposed collective risk sharing schemes such as 'collective defined contribution' pensions.

Watch the video excerpt on Tontines here.

Chapter 5 of the updated 2022 report can be read here.

The full OECD Pensions Outlook report can be purchased here

Our thanks to Ebrahim K Ebrahim, Chairman of the annual Arab Pensions Conference & his team at Fintech Robos for hosting this important event, the full version of which can be viewed here.

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© 2024 Tontine Trust Advisors LLC ('Tontine Trust'). All rights reserved.

Tontine Trust is a fintech enabling consumer-friendly lifetime income retirement products such as the state of the art TontineIRA™ via banks, chartered trust companies and credit unions (each a ‘Bank’).

Banking, trustee and fiduciary services in the US are provided by partner Banks which are regulated in the US to act as fiduciaries on behalf of US Tontine IRA™ accountholders (‘members’).

Tontine Trust provides and operates the TontineIRA™ administration and record-keeping platform on behalf of and under the supervision of the Banks.

Tontine Trust is not a Bank or a trust company and does not provide banking & fiduciary services other than certain administrative services in a ministerial capacity as the Trust Advisors to the Tontine IRA™s.

No information on this website or the platforms provided by Tontine Trust should be taken as constituting individual advice to you. The information is informational and of general guidance only. Tontine Trust does not provide investment management services, financial advice, banking or fiduciary services.

The choices you make or do not make around the investment of your retirement account are your own responsibility.‍ Neither Tontine Trust nor the Banks can be held responsible for any financial loss arising from your retirement choices or lack of them.

The amounts and duration of the lifetime income from the Tontine IRA™ are indicative only. By design, neither the amounts nor the duration of retirement income payments from a tontine plan are fixed or guaranteed.

Based upon many years of research and development, the TontineIRA™ platform displays reasonable best estimates of what level of income you can expect to receive over the course of your lifetime. These estimates are constantly reviewed (sometimes nightly) to incorporate any effects on expected incomes caused by changes in interest rates, investment returns, life expectancy and/or the actual mortality experience of members sharing the same tontine.

The Banks we work with are required to manage US trust assets in accordance with the Uniform Prudent Investor Act.‍

To ensure maximum security of capital and income for members, the Tontine IRA™ assets will be invested by the Banks in a basket of FDIC insured deposits such that each up Tontine IRA™ account can obtain FDIC coverage up to approximately $10m of assets per member.

Note that while the deposits made on behalf of the Tontine IRA™s are FDIC insured, the IRA accounts themselves are not a deposit or other obligation of, or guaranteed by a Bank or state chartered trust company and are not directly insured by the FDIC. Therefore they should be considered as being subject to investment risks, including a possible loss on the principal amount invested, for example when a member passes away before they have received total income in excess of their original contribution to the TontineIRA™.