Swiss rate fixed at 2.25%
The Swiss Federal Council, the Bundesrat, has decided to lower the minimum guaranteed interest rate on pensions to 2.25% from 3.25% as of January 1 2004.
It had been widely expected that the rate, which was lowered to 3.25% from 4% in January this year, would be kept on hold. The decision to cut the rate was based on findings from Complementa Investment Controlling and AWP Sozial Sicherheit.
The Federal Office for Social Security, BSV, said that the studies by the two organisations revealed an increase in the number of underfunded Pensionskassen from 45 to 60% over the first three months of 2003.
This figure has since fallen back to 40% thanks to market improvements, and now almost 20% of Pensionskasse are more than 100% funded. However, the BSV says the extreme volatility of the financial markets means that there is still a risk of a reversal, making it necessary for the rate to be reduced.