Life Cycle Investing and Occupational Old-Age Provision in Switzerland

Swiss economists have proposed to individualize the funded second pillar of the Swiss retirement provision system (BVG) by granting employees flexibility with respect to the contribution rate and risky asset share in their accounts. Opponents have stressed that such a reform would transfer the investment risk from pension funds to financially illiterate employees and thus imply a welfare loss.

Florian Zainhofer uses the theory of life cycle investing, i.e. how we should optimally choose o...