SWITZERLAND - The smaller chamber of the Swiss parliament (Ständerat) has now agreed the conversion rate of second pillar pensions should be cut to 6.4% by 2015 in light of the financial crisis.
The other parliamentary chamber (Nationalrat) had already passed this bill last year and was criticised by the Ständerat for "speeding through the pension reform".
However, the Nationalrat's proposal was less ambitious than what the government suggested which wanted a cut to 6.4% in 2011 already. (See earlier IPE article: Switzerland to cut pensions by 8% from 2015)
A few delegates suggested during yesterday's parliamentary debate there should be a further cut though they recognised the newly-proposed cut was a "possible political compromise".
MPs also heard the cut of the conversion rate, which is used to calculate pensions, to 6.4% will mean CHF400 (€260) less in pension payments per year for someone who has saved CHF100,000 for their retirement.
Conservative politician Alex Kuprecht urged the chamber to agree to the bill proposed by the Nationalrat to ensure the future of the second pillar.
"If we do not agree to this the contributions of active members will have to be used to pay pensions in the long-term," he warned.
"This mixing of funded pension systems and PAYG is detrimental to the system."
In the end, the whole chamber voted in favour of the cut to 6.4% by 2015, dismissing a minority proposal for a cut to only 6.4% straight away.
Both parliamentary chambers hold equal weight and status in Swiss decision-making.
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