SWITZERLAND – The Swiss government has given final approval to several major first-pillar reforms, including equalising the legal retirement age for men and women and reducing the legal amount of the reserve fund for the state pension scheme.

The biggest change brought on by the reforms is that the legal retirement age for female and male workers is to be harmonised at 65. Women currently may retire at 62.

However, the reforms provide for a reduced state pension for low-income workers who retire between the ages of 62 and 65. Pension benefits for people who are widowed but without children will also not be abolished.

On the financing side, the reforms enable the reserve fund for the state pension scheme to fall to 70% of annual expenditure on pensions from 2011 compared with 100% currently.

If, however, the fund falls under 70%, the state pension benefit will only be raised every two years and solely on the condition that the inflation rate since the previous increase exceeded 4%.

The Swiss Federal Social Security Agency (BfS), which detailed the reforms, added that if the reserve fund fell under 45% of annual expenditure, pension benefits would be frozen until such time that the fund again exceeded the figure.

BfS estimates that the first-pillar reforms will save the government CHF341m (€219m) by 2020.

Separately, Pensionskasse Post, the CHF12.3bn postal scheme, said it would invest CHF300m in commodities over the next few weeks. The fund did not disclose which asset managers it would contact.

The move is a result of its wish to further diversify its portfolio and take advantage of the high returns delivered by commodities. For 2005, the scheme expects a return of at least 4.5%, which is under the average for other Swiss pension funds.

All told, Pensionskasse Post invests 5% of its holdings in alternative asset classes, half of which are in hedge funds and half of which are in commodities.

Regarding the rest of its allocations, the fund invests 32% of its assets in equities, 45% in bonds – though only 5% of this share are foreign – and 15% in real estate.

Established in January 2002, Pensionskasse Post has around 50,000 contributing members and 20,000 pensioners.