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Swiss mull boost to minimum guaranteed rate

SWITZERLAND - The minimum interest rate of second-pillar pensions might be boosted from 2.25% to 2.75% in 2005 if the suggestion of the Social Security Commission, SGK, of the lower chamber of parliament is accepted.

The SGK commission’s recommendation to the Federal Council is the latest in a string of proposals on how to handle the issue of the minimum interest guarantee, which has been lowered from four percent to 3.25% in January 2003 and a year later to 2.25%.

The commission’s request, passed with 13 votes in favour of the 2.75% margin, comes after its counterpart in the upper chamber had settled for 2.5% with seven votes in favour and four against.

The BVG-Kommission, which advises the executive on pensions, has already come out in favour of the 2.25% minimum interest, voting against an increase of the margin.

Christine Goll, president of the SGK-Commission, told the Swiss media on Friday that, after the change of trend of the economy, a “sign” had be given for the security of the social welfare.

Goll was quoted as saying that interest rate reductions are often connected with pension and the recommendation of the SGK Commission was aimed at restoring confidence in occupational pensions.

The recommendation of the SGK has already been delivered to the BGV-Kommission but the upper chamber is expected to make a decision in autumn.

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