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Monika Bütler
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Prof. Dr. Dr. h.c.
Last Name
Bütler
First name
Monika
Phone
+41 71 224 23 17
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@MonikaBuetler
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PublicationTransparency in Parliamentary VotingWe use a change in the voting procedures of one of the two chambers of the Swiss parliament to explore how transparency affects the voting behavior of its members. Until 2013, the Upper House (Council of States) had voted by a show of hands. While publicly observable at the time of the vote, legislators' decisions could only be verified ex post through the time-consuming screening of online videos. In 2014, halfway through the legislative period, the chamber switched to electronic voting. Since then, the individual votes of legislators have become more transparent and observable as their votes are now recorded electronically and, in some cases, published online. Our analysis is based on individual voting behavior in all final passage votes during the 2011- 2015 legislative period. In a difference-in-difference framework, the larger chamber, the Lower House (National Council), serves as a control group. Not only have the voting procedures of the Lower House remained unchanged since 2007 but also the legislative texts on which both chambers vote are the same. This unique framework makes it possible to estimate the causal effects of voting procedures on legislators' choices. Since the voting system reform, members of the Upper House are significantly less likely to deviate from their party line. Our results reflect the increased observability of legislators' votes and the greater conformity pressure exerted by political parties, as easier monitoring enables them to enforce discipline among their members.Type: working paperIssue: 5682
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PublicationPayouts in Switzerland: Explaining Developments in AnnuitizationSwitzerland is one of the few countries with long-term experience on the payout decisions made by retirees in fully-funded pension plans. Switzerland is also atypical in its unusually high annuitization rates: A majority of retirees covered by mandatory occupational pension plans choose an annuity. This paper will shed light on this extraordinary aspect. It revisits the historical role of occupational pension plans in the provision of old age income, and examines the role of regulation in the payout phase of the scheme. Recent developments in both market conditions and regulations are used to assess the impact of certain determinants of the annuitization decision, such as money's worth ratios (MWR), means-tested benefits and behavioral factors.
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PublicationType: working paperIssue: No. 07/2009
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PublicationAnnuities in SwitzerlandSwitzerland ' s pension system has attracted considerable attention, mainly due to its reliance on a three-pillar structure. A relatively small pay-as-you-go system (first pillar) is complemented by a mandatory, employer-based, fully funded occupational pension scheme (second pillar). The main goal of this paper is to provide a detailed description and analysis of the Swiss pension system. Particular emphasis is placed on the second pillar and its role in the provision of old age benefits within the Swiss social security system. The paper shows, for example, that a typical individual with an uninterrupted career can expect a net (after-tax) replacement rate of at least 70 percent. Occupational pension plans are highly regulated. Minimum interest rate requirements and minimum conversion rates (at which the accumulated retirement balances are transformed into annuity streams) introduce many elements of defined benefit plans into notionally defined contribution schemes. The resulting money ' s worth ratios are very high (with the exception of single males). Switzerland also has a high annuitization rate by international standards (approximately 80 percent). However, due to high fragmentation of the scheme and non-uniform accounting practices, some aspects of the system are not very transparent. The paper sheds light on the financial health of the pension system and the evolution of the regulatory framework in the past two decades.
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PublicationShould You Take A Lump-Sum Or Annuitize? Results From Swiss Pension Funds( 2007)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 likely to choose the capital option.Type: working paper
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PublicationWhy Forcing People to Save for Retirement May BackfireEarly retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that an actuarially fair, but mandatory funded system may also distort optimal individual allocation. If individuals are credit constraint (or just reluctant to borrow), a higher than desired retirement capital induces people to retire earlier than they would have in the absence of such a scheme. Individuals thus retire as soon as the retirement income is deemed sufficient the pension plan avails withdrawal of benefits. We provide evidence using individual data from a selection of Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is indeed a key determinant in the retirement decisions. The fact that early retirement has become much more prevalent in the last 15 years is a strong indicator for the importance of affordability as the maturing the Swiss mandatory funded pension system over that period has led to an increase in the already high effective replacement rates. Moreover, even after controlling for the time trend, the higher the accumulated pension capital, the earlier men, and - to a smaller extent - women, tend to leave the work force.
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PublicationWhat Triggers Early Retirement: Results from Swiss Pension Funds( 2004)
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PublicationThe Choice between an Annuity and a Lump Sum: Results from Swiss Pension Funds( 2004)