Swiss iron out age anomaly
The Swiss government is preparing to rectify an anomaly in retirement ages between the country’s first and second pension pillars, which has pushed women into retirement with inadequate benefits to live on.
Legislation for the progressive increase in retirement ages for women under the first pillar AVS system – from 62 to 63 as of January this year and then to 64 by January 1 2005 – has pushed AVS out of sync with the second pillar LPP system where the nominal retirement age for women is still 62.
Verena Brombacher, a delegate at the Bern-based Swiss authority for social assurance, explains the issue: “There is a problem because some employers tend to put women to retirement at the age of 62 and these women have no first pillar cover yet, but you need both pillars to have sufficient means to live…we have made some special arrangements to co-ordinate this.”
Switzerland’s social security commission has proposed that working women be able to prolong payments into the LPP system up until the retirement limit of the AVS system. Adjustments are also proposed to the tax treatment on contributions to private third pillar funds for the same duration.
The Swiss government is expected to ratify the law in the coming weeks and apply it retrospectively from January 1 this year.