Payouts in Switzerland: Explaining Developments in Annuitization

Monika Bütler and Stefan Staubli

in Securing Lifelong Retirement Income

Published in print May 2011 | ISBN: 9780199594849
Published online September 2011 | e-ISBN: 9780191729119 | DOI:
Payouts in Switzerland: Explaining Developments in Annuitization

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Switzerland is one of the few countries with long-term experience in withdrawal decisions made by retirees in fully funded pension plans. Switzerland is also atypical in its unusually high annuitization rates, and indeed, a majority of retirees covered by mandatory occupational pension plans chooses an annuity at retirement. This chapter 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. 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, means-tested benefits, and behavioral factors.

Keywords: annuitization; mandatory participation; money's worth; annuity equivalent wealth; behavioral economics; Switzerland; pensions

Chapter.  7530 words.  Illustrated.

Subjects: Pensions

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