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Payouts in Switzerland: Explaining Developments in Annuitization

Monika Bütler () and Stefan Staubli

University of St. Gallen Department of Economics working paper series 2010 from Department of Economics, University of St. Gallen

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.

Keywords: Annuity Puzzle; Occupational Pension; Annuity; Lump Sum (search for similar items in EconPapers)
JEL-codes: D81 D91 G23 J26 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-02
New Economics Papers: this item is included in nep-age
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