King William's Tontine

By Moshe Milevsky
In a time before bonds, treasury notes, or central banks, there were tontines. These were schemes in which a group of investors lent money to a government, corporation, or king, similar to a modern-day loan syndicate. But unlike conventional debt, periodic interest payments were distributed only to survivors. As tontine nominees died, the income of survivors correspondingly increased. Morbid, perhaps, but this was one of the earliest forms of longevity insurance in which the pool shared the risk. Moshe Milevsky tells the story of the first tontine issued by the English government in 1693, known as King William's tontine, intended to finance the war against French King Louis XIV. He explains how tontines work, the financial and economic thinking behind them, as well as why they fell into disrepute. Milevsky concludes with a provocative argument that suitably modified tontines should be resurrected for twenty-first century retirement income planning.


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"King William's Tontine is an excellent read and a model for the clear exposition of a difficult and little-known subject. Financial history buffs will particularly enjoy the first half of the book, and economists interested in retirement finance will want to engage with the chapters in which the author presents his own proposal. This is a book that should grace the shelves of many libraries. Its proposals are definitely worthy of serious consideration by anyone or any institution concerned with retirement finance." The Journal of Retirement
"King William's Tontine entertains and, by asking why retirees should not be paid handsomely for bearing a little actuarial risk, informs our response to the looming retirement crisis in a way that no other book does. It should be read - with pleasure - by anyone with a personal or policy interest in this vital area." William J. Bernstein, CFA Institute Book Reviews



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About the Hardcover

Publisher Cambridge University Press
Publish date 05/09/2015
Pages 274
ISBN-13 9781107076129
ISBN-10 1107076129
Language English