KiwiSaver phase two decummulation

KiwiSaver phase two decummulation

Consider a scheme where on reaching 65 savings could be paid to a central fund. One would then receive a percentage of that sum until ones death. If say life expectancy is 80 then the percentage or proportion is 1/15th. The drawdown continues til death if early or later no refunds. Thus those who live longest and funded by those who depart soonest. The advantage of course is certainty. There is a loss of flexibility and inability to bequeath monies but these can be achieved using other monies. The private sector is unlikely to provide such a sceheme as it requires large numbers to attain smoothing out of variability. Interest might be payable too but the nub of this idea is decummulation not income generation.


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