Insights from Switzerland's Pension System
Published in Mitchell, O. and R. Shea (Eds.) (2016). Reimagining Pensions: The Next 40 Years. Oxford, UK: Oxford University Press.
Posted: 14 Nov 2014 Last revised: 3 Apr 2020
Date Written: November 1, 2014
Abstract
This chapter takes Switzerland's much praised three-pillar system to illustrate some of the challenges pension system reforms face in an aging society. It shows that policymakers are confronted by some individuals with behavioral anomalies, and by others who strategically exploit the system The trade-off between providing incentives and adequate retirement income limits policy options, especially if reformers do not want to impose too many restrictions on individual choice and avoid excessive burdens for the young generation. Pension reforms can also be seriously challenged by political constraints, in particular, when voters have a direct say on proposed changes.
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