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Switzerland’s Nussbaum fears for 3-pillar system

SWITZERLAND – Werner Nussbaum, one of the architects of the Swiss second pillar pension system, says he has fears about the “destruction” of the three-pillar concept.

He said the abuse of lawmaking could lead to the “destruction of the fundamental balance of the constitutional concept of the three pillars”.

Social security and law expert Nussbaum, writing in a newspaper article, launched a “fundamental critique of legislation in our time in general, specifically focused to the Pension Law in Switzerland.”

“I'm criticising the abuse of legislation to get results in applying the existing law. Legislation itself can never produce appropriate outcomes in the practice, but those who practice the law can do it,” Nussbaum told IPE.

His observations were published at the same time as the final implementation of the review of the second pillar that include changes to the rules on marginal income, implemented at the beginning of January.

In a move to make sure that more low-income workers are insured, the cabinet has lowered the threshold to join the second pillar, known as BVG, from CHF25,320 (€16,517) a year to CHF22,575. As many as 100,000 workers could be affected, a social security official told IPE.

Nussbaum stressed he was not objecting to a single aspect of legislation. He conceded that there were “some basic elements, that need accurate change”. But he added that “there are two thirds of the new provisions which do not need a change of the law, but of the ordinances and the directives of the administration”.

“I'm criticising the lawmaking process without any fundamental research on the outcome and effects the new rules have on practice. I'm criticising the destruction of the fundamental balance of the constitutional concept on the three pillars, mainly first and second pillar” he continued.

He also said many of the new legal provisions lacked proof of necessity: “The main problem and need is sophistication and courage to apply the law.”

He said the second pillar was of “fundamental importance”. “Switzerland - I say with some pride - has an excellent three pillar concept in comparison with other countries in Europe but the concept itself does not work to get results on behalf of the beneficiaries.”

“We need the best workers and the best toolkits to implement this concept in the daily practice,” Nussbaum said and suggested legal courts and judges play “an important role also to develop the law.”

“There is a need to integrate much more the courts to develop the pension law. But we need the best lawyer as judges and we need an improvement of the judiciary system.”

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