A decision by the Swiss parliament to grant new retirees a monthly pension top-up of CHF70 (€65) has only “postponed” imminent issues, not solved them, according to industry experts.
On Friday, the Swiss parliament decided on a compromise for the pension reform “Altersvorsorge 2020” (AV2020), which includes additional payments to be financed via a VAT increase.
“Looking at the financial situation in the first pillar, this is only postponing the problem of underfunding,” said Willi Thurnherr, managing director at Aon Hewitt, Switzerland.
“It is also an attempt at cross-compensation between the two pillars, which is quite alien to our system,” he told IPE.
The monthly top up for new retirees is meant to compensate them for cuts to their future pensions from the second pillar, where the minimum conversion rate will be cut from 6.8% to 6%.
Thurnherr said: “It was a compromise which seems to have been necessary to get approval for the reform package.”
Indeed, the two major Swiss unions, VPOD and Unia, have already voted to support the reform package in the binding referendum in September.
Thurnherr said it was important “that a compromise was reached”, adding that “there is a good chance that people will approve the reform as a whole package”.
For the Pensionskassen the reform which is to come into effect in 2018 will only bring minor adjustments and formal changes, confirms Thurnherr.
Many larger Pensionskassen are already applying a lower conversion rate, while some have also anticipated the increase in the retirement age for women from 64 to 65.
Meanwhile, the Swiss pension federation Asip called on all stakeholders to support the whole reform package and prevent it from becoming a “victim of ideological differences”.
Like most experts, Asip had previously criticised the idea of a general top-up to the first pillar pension, but in its latest press release on the parliamentary vote this criticism was not mentioned.
“We see the reform package as a chance to safeguard retirement provision as a whole and occupational pension provision in particular,” Asip said.