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Cerp Università Di Torino

Few Universität

Monika Bütler (corresponding

Prof Jörg Baumberger

St. Gallen

We use a unique dataset on individual retirement decisions in Swiss pension funds to analyze
the choice between an annuity and a lump sum at retirement. Our analysis suggests the
existence of an ?acquiescence bias?, meaning that a majority of retirees chooses the standard
option offered by the pensions fund or suggested by common practice. Small levels of
accumulated pension capital are much more likely to be withdrawn as a lump sum, suggesting
a potential moral hazard behavior or a magnitude effect. We hardly find evidence for adverse
selection effects in the data. Single men, for example, whose money's worth of an annuity is
considerably below the corresponding value of married men, are not more likely to choose the
capital option

Bütler, Monika

Teppa, Federica

EconStor (ZBW Kiel)

Should you take a lump-sum or annuitize? : Results from Swiss pension funds

http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.335.5123

• from the CESifo website: www.CESifo-group.deCESifo Working Paper No. 1610 SHOULD YOU TAKE A LUMP-SUM OR ANNUITIZE? RESULTS FROM SWISS PENSION FUNDS

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