SWITZERLAND – Swiss interior minister Alain Berset wants to lower the conversion rate to 6% as part of a major overhaul of pension system, according to local media.
Swiss news daily Sonntags-Blick published details of Berset's reform plans for the first and second-pillar systems, entitled Altersvorsorge 2020, or Retirement Provision 2020.
A spokeswoman for the Interior Ministry declined to comment and attributed the reports in local media to "an indiscretion".
However, she did confirm that Berset would make his plans public before the summer recess.
According to Sonntags-Blick, the interior minister, who took over from Didier Burkhalter in the autumn of last year, wants to lower the conversion rate used to calculate pension payouts from accrued assets from 6.8% to 6%.
Despite the fact the so-called Umwandlungssatz is one of the most highly debated issues in the Swiss second pillar, the newspaper provided no details on how Berset planned to account for the conversion-rate cut.
According to the paper, the leaked report says Berset will maintain current levels of retirement provision for all three pillars of the pension system, which suggests he will have to strengthen either the first or the third pillars if he cuts payouts from the second by reducing the conversion rate.
He also reportedly plans to hike the retirement age incrementally for women in both pillars – from 64 to 65, the current retirement age for men.
In addition, the retirement age for both men and women will become more flexible, ranging from 62 to 70, with benefit cuts for early retirement, Sonntags-Blick said.