SWITZERLAND – Hans Ender, president of Swiss pension fund association ASIP, has defended the government’s proposed cuts in future corporate pension benefits and urged more “restraint” in adjusting current benefits for inflation. Asked by the Berner Zeitung why he supported the government’s move, Ender replied that it was necessary “to take into account the higher life expectancy of pensioners and dwindling market returns”. Last June, the Swiss Social Security Agency proposed cutting the rate of conversion for corporate pensions to 6.4% by 2011 from around 7% currently. This means that by 2011, the annual benefit for a retired Swiss worker with CHF100,000 (€63,600) in accrued savings will be CHF6,400. The proposed benefit cuts must be approved to take effect. But in the newspaper interview, Ender said: “One should not forget that the rate of conversion, like the minimum guaranteed return, is a minimal value. It is not forbidden for a fund to use a higher rate of conversion.” “I myself prefer a reference rate that is achievable and doesn’t force me to take big risks. And if one has surpassed that rate, one can always distribute more earnings,” he added. Ender also said it was unfair that future pensioners would see their benefits cuts while current ones were spared. “Today’s pensioners are clearly advantaged. I believe, however, that pensioners and future pensioners are part of the same community and that when times are hard, everyone sacrifices.” Ender stressed that he did not support a cut per se, but rather “more restraint when it comes to adjusting current pension benefits for inflation.” This, along with the government’s move on the rate of conversion, would help boost the financial health of Swiss schemes (Pensionskassen), he said. “Yet since any form of pension cuts are difficult to introduce politically, I think at the very least pensioners should make a contribution to the Pensionskassen to cover administrative costs,” Ender said. According to him, the costs relate to the schemes’ paying out benefits and contributing to an insolvency protection fund.