SWITZERLAND - The Swiss retailer Migros has decided to maintain a defined benefit scheme in its Pensionskasse but increase the retirement age.

Members of the CHF15bn (€10.5bn) Migros Pensionskasse (MPK) have agreed to raising the retirement age by one year to 64 from 2012 onwards with a transition phase until 2014.

Joerg Zulauf, head of finances at Migros, noted in a communiqué for employees that the changes were necessary because the MPK was maturing. That said, he also pointed out the benefits remained well above the legal minimum and that the pension fund was financially stable.

Employer contributions will be reduced slightly from 1.95% to 1.8% and all changes are still subject to approval by local cooperatives working with Migros.

"I think it is too early to see the step we've taken as a general trend," said Christoph Ryter, head of both the Migros Pensionskasse and of the Swiss pension fund association ASIP.

He noted some people could see such a step as provocation in the wake of the referendum on the conversion rate, where the vast majority voted against a further cut in the rate. (See earlier IPE story: Seven in 10 voted against Swiss conversion rate cut

"However, it is a fact that the result of the referendum left the problems of many pension funds unsolved," he added.

Ryter explained many pension funds have already made cuts in their liabilities over recent years by lowering interest rates paid to members and actuarial rates where possible.

One other Swiss pension fund which is set to increase its retirement age is the Swiss railway fund SBB. Its move is part of a major recovery package. (See earlier IPE story: SBB gets CHF1.148bn in state aid )

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