This paper presents new findings on the costs of individual annuities, both in the individual annuity market and in two large defined-contribution pensions systems, the federal government"s Thrift Savings Plan (TSP) and TIAA-CREF. While the authors do not assess directly the cost of annuitization for any particular individual accounts social security system, they report background information that should be helpful in evaluating such costs. The paper provides a detailed summary of the structures employed by the TSP and by TIAA-CREF to offer individual annuities to their participants. The goal of the paper is to inform discussion of potential options and structures for providing annuities under individual account systems that might be considered as part of a social security reform plan.
