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Summary
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is for example true if the individual highly values a smooth level of
consumption between their working life and retirement. The
calculations in the report also show that it could be economically
profitable to withdraw the occupational pension over a few years if
the total pension is low and the individual is eligible for housing
benefits.
The simulations of the effect on the economy as a whole from a lower
share choosing to annuitise show that the effect on government
spending is marginal, as the great majority of today’s pensioners
holding occupational pensions are not dependent on government
benefits.
ISF’s opinion is that the increase in choice for pension withdrawals is
positive as long as individuals have adequate information and
knowledge about their occupational pensions, and the potential
consequences of their withdrawal choice. For individuals who either
do not have enough knowledge or have no interest in choosing, there
should be a valid default option. There are indications that some
individuals have difficulty processing information about the
consequences of different pension withdrawal choices and some of
the information letters that are sent out by the occupational pension
insurance companies prior to retirement lack important information.