Behavioral Responses to a Pension Savings Mandate : Quasi-experimental Evidence from Swiss Tax Data

A straightforward policy tool to boost retirement savings is requiring workers to contribute some fraction of their earnings to a pension account. Drawing on detailed administrative tax data on income, wealth, and savings, I study the savings response to the occupational pension savings mandate in Switzerland using regression discontinuity and difference-in-differences designs. I find that employees respond to being obliged to contribute to an occupational pension account by raising voluntary forms of retirement savings such as preferentially taxed private pension savings and occupational pension buy-ins. The crowding-in effect on private pension savings is driven by reduced information frictions and increased salience of retirement savings and facilitated by having another earner in the household. The additional retirement savings appear to be funded by reduced private savings rather than lower current consumption, leaving total savings unaffected by the mandate, although this is imprecisely estimated.