CHF350m needed as special payment from Swiss employers
SWITZERLAND - Recovery measures planned by various Swiss pensionskassen will not have a significant effect on the country's economy, according to a Swiss federal government report.
Almost 80% of pensionskassen in Switzerland are below full-funding level after the financial crisis shook their portfolios. (See earlier IPE story: Bulk of Swiss schemes now underfunded)
The funds had until June 30 to inform the supervisory authority in their canton about the recovery plans they will put in place.
In its report, the Swiss government has now estimated that a total CHF350m (€231m) will be needed in special contributions from companies as part of the measures to increase funding levels.
Swiss unions had argued that this additional financial burden for companies will adversely affect the country's economic development. (See earlier IPE article: Swiss pension level breaches constitution - union)
However, the government report said the effects on the economy will be "marginal".
It noted that measures like foregoing indexation for a year or lowering interest rates for pensionskassen members had no effect on the economic development.
As for additional contributions by employers, the government calculates an increase of payments by 0.25% for each employer and 0.13% for employees.
In total, this would dampen economic growth by 0.03% but lead to a stabilisation of retirement incomes which will affect the economic development in the future.
On the other hand, the government has dismissed the idea of halting an increase of contributions on the grounds that this would be "damaging" to the economy.
Such a moratorium would lead to a "breach of solidarity within the companies" and additional contributions might be more damaging to the economy once it has come out of the recession.
The report concluded there was "no way around" recovery measures also because the Swiss people had put their trust in the second pillar and this trust must not be disappointed.
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