Switzerland’s decision to raise the minimum guaranteed interest rate for pensions from 2.25% has come in for criticism in new reports.
Earlier this month the Swiss federal council decided to raise the rate for occupational pensions to 2.5% from 2.25% as from January 1 next year.
“The increase from 2.25% has taken place too soon,” said Graziano Lusenti, who prepared Credit Suisse Asset Management’s latest survey of the Swiss institutional market.
He said it had come at a time when “already painful measures of reorganisation”, such as the abolition or reduction of indexation and the rise in contribution rates have been put in place by pension funds.
A separate report from Swissca and investment foundation Prevista said: “Pension institutions have little scope and the increase to 2.5% in 2005 does not at all respond to their needs.”
The Swissca Pensionskassen-Studie 2004, based on a sample of 180 pension funds, argues that Swiss pension institutions have not yet recovered from recent lower stock markets – and that the legal framework is hampering their recovery.