SWITZERLAND - Employees who work beyond the statutory retirement age can continue to pay into their third pillar pension provision for five years, the government has decreed.
On reaching 64 or 65 years respectively, female and male Swiss workers will no longer have to start taking out money from their private pension provision.
The new regulation passed by the Federal Council (Bundesrat), will allow workers to continue to make tax-advantaged contributions for a maximum of five years.
This is the first step in a series of reforms to introduce incentives for people to work longer which will eventually also mean changes to the second and first pillar pension system, a government spokesman told IPE.
"There are also plans to make it possible for employees to continue paying into their occupational pensions beyond the statutory retirement age," said Anton Streit, deputy director for retirement provision in the federal department for social insurance.
In the first pillar, the so-called AHV, it is currently possible to defer payments and continue to contribute. However, Streit notes very few people are making use of this opportunity.
"There is no tax incentive and continued contributions do not lead to a higher state pension," he explained. Negotiations to change this are under way as well.
Other than in the case of third pillar pension provision, the Bundesrat needs parliamentary support to make changes to the other pillars of the retirement system.
Streit noted changes to the second pillar are already debated in parliament in one package together with the highly disputed structural reform of pension supervision in Switzerland. (See earlier IPE story: Swiss keep pension supervision outside new authority.)
"Whether or not the changes will make it through parliament will depend on the acceptance of the structural reform on supervision," Streit noted.