What is it That Makes the Swiss Annuitize? A Description of the Swiss Retirement System

Avanzi, Benjamin

doi:10.2139/ssrn.1407370

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What is it That Makes the Swiss Annuitize? A Description of the Swiss Retirement System

UNSW Australian School of Business Research Paper No. 2009ACTL06

13 Pages Posted: 20 May 2009 Last revised: 1 Mar 2010

See all articles by Benjamin Avanzi

Benjamin Avanzi

University of Melbourne - Centre for Actuarial Studies

There are 2 versions of this paper

Date Written: February 4, 2010

Abstract

The Swiss model of retirement savings and benefits distinguishes itself in several aspects. The system is successful in encouraging substantial savings, which are exonerated from tax and guaranteed. The associated market risk is not transferred to the individuals. From an international perspective it is extraordinary that more than half of the Swiss who retire choose to annuitise their capital at retirement. In addition, not only does the retirement scheme offer annuity benefits at retirement, but it also offers annuity benefits on disability and death.

In this paper we describe the Swiss social security system with an emphasis on retirement benefits, giving some insights as to what in Switzerland could explain why the so-called annuity puzzle is not observed. We also discuss some of the main issues the Swiss pensions system is currently facing.

Keywords: annuity puzzle, pensions, Switzerland

JEL Classification: J26, H55, D91, E21

Suggested Citation: Suggested Citation

Avanzi, Benjamin, What is it That Makes the Swiss Annuitize? A Description of the Swiss Retirement System (February 4, 2010). UNSW Australian School of Business Research Paper No. 2009ACTL06, Available at SSRN: https://ssrn.com/abstract=1407370 or http://dx.doi.org/10.2139/ssrn.1407370