TAXES, RETIREMENT TRANSFERS, AND ANNUITIES

In most countries, retirement benefits from pension saving must be tak en as an annuity. By contrast, Australia allows benefits to be taken a s a lump sum, and instead has recently introduced various tar incentiv es to encourage annuity purchase. This paper investigates the effectiv eness of these tax concessions, and concludes that they do little to a chieve this objective. This is because they are nullified by the provi sions of the broader tax and social security framework within which Au stralian private pension policy is set.