Payouts in Switzerland: Explaining Developments in Annuitization
Series
Working Paper Series 2010
Type
working paper
Date Issued
2010
Author(s)
Abstract
Switzerland is one of the few countries with long-term experience on the payout decisions made by retirees in fully-funded pension plans. Switzerland is also atypical in its unusually high annuitization rates: A majority of retirees covered by mandatory occupational pension plans choose an annuity. This paper will shed light on this extraordinary aspect. It revisits the historical role of occupational pension plans in the provision of old age income, and examines the role of regulation in the payout phase of the scheme. Recent developments in both market conditions and regulations are used to assess the impact of certain determinants of the annuitization decision, such as money's worth ratios (MWR), means-tested benefits and behavioral factors.
Language
English
Keywords
Annuity Puzzle
Occupational Pension
Annuity
Lump Sum
JEL Classification: D81
JEL Classification: D81
D91
G23
J26
HSG Classification
contribution to education
Refereed
No
Publisher
Department of Economics
Publisher place
St. Gallen
Number
2010-06
Subject(s)
Division(s)
Eprints ID
71322