Switzerland's voters increasingly favor a hybrid approach to retirement payouts, combining a lump-sum capital drawdown with ongoing annuity payments, according to a study released Tuesday by Lucerne University (HSLU).
The Federal Council has long pursued the goal that the first and second pillars of the Swiss pension system together replace around 60% of a worker's pre-retirement income. Yet three out of four actively insured people say that level is insufficient to feel as financially secure in retirement as they are today, the survey found.
For one in three respondents, an income-replacement rate exceeding 80% is necessary to achieve comparable security. The research was conducted in its sixth edition in cooperation with the Institute VorsorgeDialog.
On the question of how to receive accrued pension capital, roughly half of those surveyed said they would choose a combination of capital and annuity. Annuity-only payouts were favored over a pure lump-sum withdrawal.
Yvonne Seiler Zimmermann, a professor at HSLU, said the choice of payout form is driven chiefly by the amount of capital accumulated, the need for financial flexibility and individual life expectancy. When asked whether pension funds should offer multiple annuity models, more than 80% of respondents answered affirmatively, pointing to flexibility as a key concern.
The findings underscore mounting pressure on Switzerland's pillar-one and pillar-two systems to deliver replacement rates beyond the current 60% target if retirees are to maintain their pre-retirement standard of living.
