What is it that Makes the Swiss Annuitise? A Description of the Swiss Retirement System

Australian Actuarial Journal, Vol. 16, No. 2, pp. 135-162

13 Pages Posted: 23 Nov 2010 Last revised: 12 Feb 2011

See all articles by Benjamin Avanzi

Benjamin Avanzi

UNSW Australia Business School, School of Risk and Actuarial Studies

Multiple version iconThere are 2 versions of this paper

Date Written: November 22, 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, the Swiss old age security system is described 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. This question is of relevance for countries that wish to encourage annuitisation as a powerful tool to deal with the longevity risk of their elder population.

Keywords: annuity puzzle, pensions, Switzerland

JEL Classification: J26, H55, D91, E21

Suggested Citation

Avanzi, Benjamin, What is it that Makes the Swiss Annuitise? A Description of the Swiss Retirement System (November 22, 2010). Australian Actuarial Journal, Vol. 16, No. 2, pp. 135-162. Available at SSRN: https://ssrn.com/abstract=1713052

Benjamin Avanzi (Contact Author)

UNSW Australia Business School, School of Risk and Actuarial Studies ( email )

UNSW Sydney, NSW 2052
Australia

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