Annuities in Switzerland

Bü ; tler, Monika ; Ruesch, Martin

World Bank, Washington, DC

关键词: ACCOUNTING;    ADDITIONAL CONTRIBUTIONS;    ADDITIONAL INCOME;    ADDITIONAL PAYMENTS;    ADDITIONAL PENSION;   

DOI  :  10.1596/1813-9450-4438
RP-ID  :  WPS4438

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Switzerland's pension system hasattracted considerable attention, mainly due to its relianceon a three-pillar structure. A relatively smallpay-as-you-go system (first pillar) is complemented by amandatory, employer-based, fully funded occupational pensionscheme (second pillar). The main goal of this paper is toprovide a detailed description and analysis of the Swisspension system. Particular emphasis is placed on the secondpillar and its role in the provision of old age benefitswithin the Swiss social security system. The paper shows,for example, that a typical individual with an uninterruptedcareer can expect a net (after-tax) replacement rate of atleast 70 percent. Occupational pension plans are highlyregulated. Minimum interest rate requirements and minimumconversion rates (at which the accumulated retirementbalances are transformed into annuity streams) introducemany elements of defined benefit plans into notionallydefined contribution schemes. The resulting money'sworth ratios are very high (with the exception of singlemales). Switzerland also has a high annuitization rate byinternational standards (approximately 80 percent). However,due to high fragmentation of the scheme and non-uniformaccounting practices, some aspects of the system are notvery transparent. The paper sheds light on the financialhealth of the pension system and the evolution of theregulatory framework in the past two decades.