Re:Tontines may make sense despite their history of disrepute
by blowski on Wednesday June 08, 2016 @08:28AM
(#11861730)
I thought much the same thing. The price and returns of the annuity assumes that some people will die before life expectancy, and others will die later. I don't see what's unethical about that.
There are 3 big problems with pensions. Firstly, people contribute too late, so they don't get the benefits of 50 years of compound interest and stockmarket booms. Second, many companies mismanage them - see the current Philip Green at BHS debacle in the UK for an example. Thirdly, too many people don't contribute anything at all (for whatever reason), but still need some kind of income in their old age.
I don't see how tontines get round any of these problems.
There are 3 big problems with pensions. Firstly, people contribute too late, so they don't get the benefits of 50 years of compound interest and stockmarket booms. Second, many companies mismanage them - see the current Philip Green at BHS debacle in the UK for an example. Thirdly, too many people don't contribute anything at all (for whatever reason), but still need some kind of income in their old age.
I don't see how tontines get round any of these problems.