Migros Pensionskasse, the CHF29.3bn (€27.4bn) pension fund for the Swiss retailer, has disclosed three-way saving options to adapt occupational pension pay-outs to individual situations under a new defined contribution (DC) scheme.

Insured members can choose between the three saving plans – Standard, Basis and Plus – from November 2023, which will be in operation from January 2024.

With the Standard saving plan, paid contributions remain unchanged at 8.5%, but for the Basis saving plan contributions will be cut by 2% with members paying 6% of their insured wage, while for the Plus saving plan, contributions will be increased by 2% with members paying 10.5% of their insured wage.

The plan sponsor’s contribution will always be 17% of an insured wage, regardless of the savings plan chosen, the scheme announced.

From 1 January 2023, all pension fund members will be insured under the Standard savings plan, it said.

Moreover, members also have the option to continue to insure their wages if their salary halves after the age of 58.

Other retirment options offered by the fund have remained unchanged except for the Migros AHV replacement pension. Migros Pensionskasse will pay out the AHV replacement pension in the future from the age of 64, waiving the possibility of early withdrawal, it said.

The board of trustees of Migros Pensionskasse had decided to transition from a defined benefit plan to a DC structure from 1 January 2023.

A DC scheme fits with an increasing life expectancy scenario where there are persistently low interest rates and a shift towards flexible working models – it would ultimately guarantee the financial stability of Migros pension fund, it said.

Contribution calculations based on income and the amount of contributions to pay for employees and employers remain unchanged under the new DC scheme.

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