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Study seeks tailored Swiss occupational benefits

SWITZERLAND – A new academic paper says Swiss individuals would see large benefits from being able to tailor their occupational pension benefits more effectively.

The paper, published by the Organisation for Economic Cooperation and Development, “finds considerable scope for increasing member choice without dismantling the current system of occupational provision of pensions”.

Noting the current structure of the system, the authors, Monika Queisser and Edward Whitehouse, say: “The employees have only a very limited range of individual choice within this system and there has been increasing political pressure to give members more control over their benefits.”

The 53-page study says there are three areas in which members could exercise choice: portfolio, pension fund manager and withdrawal of assets.

Portfolio choice would involve allowing funds to offer member choice, or require funds to offer different investment options.

Manager choice, which “could have a more profound effect on the occupational pension sector”, has already been tried in the UK without undermining occupational schemes, the report states.

As for asset withdrawal, the authors propose that members should have access “to at least some of their pension assets at retirement”.

“All of these reforms would, of course, need careful attention to the detail of their design and implementation,” Queisser and Whitehouse say.

“Nonetheless, the benefits deriving from the ability to tailor their retirement savings better to their wants and needs would be large.”

The 53-page working paper, “Individual Choice in Social Protection: The Case of Swiss Pensions”, also proposes specifying a minimum retirement income.

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