Swiss pension funds have consolidated over the year the practice of transferring pensions to a partner in the event of death of an insured, according to an analysis of the biometric variables relating to occupational pensions – BVG 2020 – conducted by Aon and Libera.
The duo noted that the practice of paying a benefit beyond the mandatory part of occupational pensions, or überobligatorische Leistung, is now widespread among Swiss pension funds.
The amount of pension capital for retirees, and the actuarial conversion rates (Umwandlungssätze), also depend on the probability of leaving a pension to a partner in the event of death.
These probabilities have however decreased over the years, according to the BVG 2020 compared to the last data collected in the BVG 2015.
The probability that a pension is paid to a partner in the event that a man aged 65 years old dies is 69% this year compared to 80% in 2015, while for women aged 65 years old is 39% based on BVG 2020 compared to 42% in 2015.
The BVG 2020 data is based on statistics on insured for the years 2015-2019. The data is used to calculate pension obligations.
The parameters have been used until the end of last year by almost 1,100 pension institutions to assess two thirds of the pension capital.
Migros-Pensionskasse, the Pensionskasse for the BASF Group, comPlan and Publica are among the pension funds that have provided data to compile the BVG 2020 analysis.
The BVG 2020 excludes statistical data from 2020, therefore does not take into account the consequences of COVID-19 on the longevity of pensioners.
The effects of the COVID-19 pandemic on future pensions are still uncertain and will be mapped to define the parameters for the BVG 2025.
According to the 2020 variables, life expectancy of Swiss at retirement age has increased over the course of the last five years.
Men aged 65 live on average 0.65 years longer to reach a life expectancy of 20.42 years at retirement age, while women aged 65 live 0.27 years longer for a total 22.20 years. For women, life expectancy increased slightly less than the 22.47 years expected.
Overall, the BVG 2020 confirmed that retirees entitled to occupational pension benefits in Switzerland are living longer, although the increase is less remarkable than in the past.
At the same time, it confirmed the trend that there are significantly less cases of disabilities, which have decreased by 20%, according to the 2020 analysis, compared to the BVG 2015. This decline is more visible among men than women.
Overall, the probability of disability cases has fallen by 50% over the past 10 years.