Defined terms for the annuity market and lifetime income landscape.
Executive Order 14330 directs the Department of Labor and SEC to reduce regulatory barriers to alternative asset investments in defined contribution retirement plans — a category the order's Section 3(a) defines to include lifetime income strategies and longevity risk-sharing pools.
Expected utility theory is the dominant framework in economics for decisions under uncertainty — the idea that a rational decision-maker weighs each possible outcome by both its probability and its perceived value, and chooses the option with the highest weighted total.
The expected value paradox is the broader class of decision puzzles — of which the St. Petersburg paradox is the established case — in which a conventional expected-value calculation produces a recommendation no reasonable individual would accept.
Expense loading is the component of an annuity's pricing that recovers the carrier's acquisition costs, ongoing administration costs, and distribution compensation, built into the premium or income calculation rather than charged as a separate fee.
Falling rate environment effects on annuity pricing are the changes in payout rates on newly issued contracts, mark-to-market position of existing bond portfolios, and reinvestment economics on maturing assets that occur when prevailing nominal interest rates move lower over a sustained period.
