Switzerland's AV2020 pension-reform package faces delay
The debate over Switzerland’s Altersvorsorge 2020 (AV2020) has hit something of a stumbling block, as the SGK-S – a commission on social issues advising the Ständerat – rejected major amendments to the pension reform package proposed by the lower chamber, the Nationalrat, in September.
The commission recommended, among other things, increasing first-pillar pensions for people retiring from 2019 by CHF70 (€65.3) per month.
This “cross-compensation” for other measures, such as the cut to the second-pillar minimum conversion rate (Mindestumwandlungssatz), had been demanded by the centre-left parties but rejected by conservatives and the pension industry.
In the Nationalrat, conservative MPs hold more sway than in the Ständerat, which consists of representatives for each of the Swiss cantons.
The increase to first-pillar pensions was made despite Swiss voters having rejected a general increase of AHV/AVS pensions a few weeks ago.
The commission’s proposal met with sharp criticism from Peter Wirth, industry expert and author of the Swiss pensions newsletter Vorsorgeforum.
“The fake argument that CHF70 is the political price to ensure the AV2020 project survives a referendum is an illusion at best but more likely humbug,” he said.
He argued that the more than 1.5m people already receiving a first-pillar pension from the AHV/AVS or retiring before 2019 would feel betrayed and vote against the proposal.
Unions and other worker representatives welcomed the proposal, as they had been among the more outspoken critics of the Nationalrat’s doing away with the increase.
The SGK-S also rejected the Nationalrat’s proposal to ensure an automatic increase in retirement age and VAT levels should AHV/AVS funding prove insufficient.
The Ständerat is to debate the reform draft in December.
For more on the pension reform debate, see our Pensions In Switzerland special report in the November issue of IPE magazine