Should you Take a Lump-Sum or Annuitize? Results from Swiss Pension Funds

Monika Buetler and Federica Teppa
Authors registered in the RePEc Author Service: Monika Bütler ()

No 1610, CESifo Working Paper Series from CESifo

Abstract: We use a unique dataset on individual retirement decisions in Swiss pension funds to analyze the choice between an annuity and a lump sum at retirement. Our analysis suggests the existence of an “acquiescence bias”, meaning that a majority of retirees chooses the standard option offered by the pensions fund or suggested by common practice. Small levels of accumulated pension capital are much more likely to be withdrawn as a lump sum, suggesting a potential moral hazard behavior or a magnitude effect. We hardly find evidence for adverse selection effects in the data. Single men, for example, whose money’s worth of an annuity is considerably below the corresponding value of married men, are not more likely to choose the capital option.

Keywords: occupational pension; lump sum; annuity; choice anomalies (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-lab and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Should You Take a Lump-Sum or Annuitize? Results from Swiss Pension Funds (2005)
Working Paper: Should You Take a Lump-Sum or Annuitize? Results from Swiss Pension Funds (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1610

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