Moshe Milevsky Publishes Tontine How-To Book
He says the pools can help the participants maximize income.
Moshe Arye Milevsky is distributing a book that actuaries and others can use to design longevity-based collective investment pools outside of an annuity or pension plan wrapper.
The York University finance professor is offering access to the electronic version of the book, “How to Build a Modern Tontine,” free of charge.
What It Means
If you’ve also wanted to set up and run a tontine, now you can.
The Book
The book offers chapters on subjects such as tontine simulation construction, risk management and provisions for death benefits and refunds.
At deadline, the book had 2,326 views on the Springer website.
“How to Build a Modern Tontine” is a sequel to Milevsky’s 2020 book, “Retirement Income Recipes in R.”
Milevsky is also the author of “King William’s Tontine: Why the Retirement Annuity of the Future Should Resemble Its Past.”
Where Tontines Fit In
Milevsky notes in the book that a tontine is different from an annuity or a pension because it cannot offer any guarantee that the participant’s stream of income will last for an entire lifetime.
A tontine can help a participant benefit from the fact that the number of participants who are locked into an investment fund will shrink as time passes, Milevsky writes in the book.
“Even if investors are offered a money back feature that allows their beneficiaries to reclaim unearned principle, the mortality credits will enhance returns by triple-digit basis points,” Milevsky writes. “The modern tontine is a clever way to squeeze just a bit more consumption life from your financial assets, in exchange for sharing those assets with someone else in your cohort.”
Moshe Milevsky. (Photo: Milevsky)