SWITZERLAND - The Swiss government has confirmed a referendum will be held on 7 March 2010 which will include a question on the pensions conversion rate.
The Swiss electorate will go to the polls on that date to decide on three different topics: changes to the law allowing research on humans, to the treatment of animals and the final question will be on the mandatory pension system regarding the conversion rate, which is used to calculate pension payouts from the accumulated capital at the start of the retirement phase.
Both parliamentary chambers had agreed over the last year to cut this rate to 6.4% by 2015, changing original plans for a cut to 6.8% by 2014, although they dismissed more drastic proposals to cut it to 6.4% over the next two years.
Critics under the leadership of large unions have begun to organise themselves and have started collecting signatures on a referendum, the outcome of which will be binding for the Swiss government. (See earlier IPE story: Front against conversion rate cut grows)
Among the critics of a further cut in the conversion rate - which is currently still at around 7% - are employee representatives as well as experts from the pension fund industry. (See earlier IPE story: Profond changes fee-structure post-crisis)
In contrast, both the Swiss pension fund association, ASIP, as well as the Swiss Insurance Association, SVV have sent out statements arguing in favour of a lower conversion rate.
ASIP pointed out that a lower rate will ensure the sustainability of the system without having to shift money from active members to retirees.
"Abandoning the necessary adjustment would lead to the creeping introduction of a PAYG system too for pensionskassen, which should not be part of this pillar," said ASIP.
It noted that existing pension payments will not be affected by the measure.
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