ADVANCED LIFE DEFERRED ANNUITY AS A BENEFIT PAYMENT METHOD IN EMPLOYEE CAPITAL PLANS

<ns3:p>Employee Capital Plans, introduced in Poland in 2019, are occupational pension schemes with defined contribution (DC). Contribution rate is set in advance, and the level of benefit depends on many factors: contributions paid into the scheme, number of years of participation, investment rate of return and finally the method of benefit payment. Legislation enables several options for benefit payout – periodic withdrawal of funds by the participant (or by the participant and their spouse), provided there will be at least 120 monthly payments, and transfer of funds to an insurance company in order to buy an annuity paid for life. In some countries, as well as in the literature, a different solution can be found, called advanced life deferred annuity. Aim of this paper is to present this concept and to estimate advanced life deferred annuity conversion rates using life tables for Poland. A model of Employee Capital Plan is constructed in order to calculate and compare benefit levels a participant could secure for different payment options.</ns3:p>