The significant change is not always immediately visible. This is also true for this year’s Retirement Monitor by Axa Investment Managers, an annual study on the Swiss population’s attitudes towards the second pillar and retirement. When asked which payout option they preferred, 45 percent of respondents chose a monthly pension, 24 percent favored a mix of capital withdrawal and monthly pension, and 17 percent preferred a full capital withdrawal (see chart below).

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The 17 percent of respondents opting for capital withdrawal is consistent with previous years. «However, according to recent data from the Federal Statistical Office, the actual proportion stands at 37 percent, with 44 percent receiving a pension», says Werner E. Rutsch, study lead and member of the management board at Axa Investment Managers.

Impact on Financial Institutions

This discrepancy is unexplained by Rutsch, but he anticipates that capital withdrawal will become increasingly significant for future retirees. According to Rutsch, a trend is discernible in this regard.

Financial institutions, particularly banks and insurers, stand to benefit from this trend with products tailored to this demographic. Insurers, in particular, have seen growing importance in life insurance business, especially as returns from the once-lucrative motor vehicle sector have stagnated. For pension funds, this means their advisory role will become even more relevant. «They maintain a neutral position and can best illustrate the optimal solution for an insured person,» Rutsch states.

Working Beyond Retirement

Another notable finding from this year’s Retirement Monitor is the increasing importance of continuing to work beyond retirement. Nearly two-thirds of respondents (65 percent) are now open to working voluntarily past retirement age, up from 41 percent in 2016. The desire to work is primarily driven by enjoyment and fulfillment rather than financial necessity. (See chart below)

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However, only 34 percent of respondents believe they will realistically find employment after retirement. «There needs to be and will be changes in this area. Particularly concerning the shortage of skilled workers and demographic developments», Rutsch claims.

Saving on Federal Expenditures

Regarding pension security, more than half of respondents (58 percent) advocate for securing pensions by cutting federal expenditures. A majority would reduce spending on foreign aid, the military, and agriculture, while only 1 percent would cut spending on culture and sports.Bottom o