International Pension Research Association (IPRA)/CEPAR Webinar on

Adam Smith’s Reversionary Annuity: Money’s Worth, Default Options, and Auto Enrolments

Speaker:  Moshe Milevsky (York University)

Date: 19 July 2023, 12-1pm UTC time zone (10-11pm AEST Sydney, Australia) (for other time zones click here


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Adam Smith’s Reversionary Annuity: Money’s Worth, Default Options, and Auto Enrollment
Presentation by  Moshe A. Milevsky
Abstract: When Adam Smith – author of Wealth of Nations (1776) and Theory of Moral Sentiments (1759) – joined the University of Glasgow as a 28-year-old professor in 1751, he participated in a “benefit scheme” that was unique for its time, although quite common in the 21st century. The scheme offered participants a choice of levels at which to contribute savings to a fund, ranging from 2% to 10% of wages, with benefits granted in the form of a reversionary annuity to a spouse and/or lump sum to children. This lecture (i.) describes the scheme in financial and actuarial terms, (ii.) values Smith’s annuity and (iii.) examines the choices made by participants; a scheme which was prudently managed by Presbyterian ministers in the Church of Scotland. The (novel) research contribution is to leverage archival data to measure the extent of insurance anti-selection and to show that debates around choice architecture, default options and auto enrollment which infuse the pension & retirement literature in the 21st century, were prevalent in the mid 18th. For the record, Adam Smith actively contributed at the highest allowed rate, but it wasn’t a “good” investment for him ex ante or ex post. As for why, one must attend the presentation…
About the speaker:
Moshe MilevskyMoshe Arye Milevsky is a tenured professor at Schulich and a member of the Graduate Faculty of Mathematics & Statistics at York University. His research interests are at the intersection of pensions & retirement, actuarial mathematics and the history of financial products. In addition to academic research work, Professor Milevsky is a fin-tech entrepreneur with a number of U.S. patents and computational innovations in the field of retirement income financing.

For media or event enquiries, please contact Silke Weiss.
Wednesday, July 19, 2023 - 22:00
End date: 
Wednesday, July 19, 2023 - 23:00