Switzerland: Decision time for Swiss
As the pensions law comes up for review, ASIP will aim to ensure that occupational pensions will have full scope to develop
At the present time, the eleventh review of the AHV (national basic old age and surviving dependants’ insurance) and the first review of the BVG (law relating to occupational provision) are in the pipeline in Switzerland. In the case of the AHV review, this will be concerned primarily with the financial consolidation of insurance, which over the next 10 to 15 years will have to take into account substantially increased costs as a result of the demographic trend.
It is mandatory in Switzerland for all employees, who have an annual income of over SFr24,120, to have occupational provision. The minimum benefits to be provided by the providential schemes are laid down in the BVG. As the BVG is purely a skeleton law, the possibility of insuring more extensive, voluntary benefits is left to the pension schemes themselves. A number of pension schemes are making use of this possibility. It is the intention of the Swiss upper chamber, the Bundesrat, to retain this system within the framework of the first BVG review. This review is concerned more with improvements to technical details, which should make the handling of occupational provision easier.
The ASIP is doing everything it can to ensure that:
l apart from advising its members on all current legal issues, occupational provision will be able to retain its place within the Swiss 3-pillar system;
l the legislature will refrain from inserting unnecessary regulations;
l the providential schemes will still have reasonable scope to expand their versatile system of benefits.
As a result of these actions, Swiss occupational provision, which is financed by the level premium system, will be able to relieve the strain on the AHV national basic insurance quite substantially.
The association is particularly concerned about the currently increasing number of calls for restrictions on the tax treatment of occupational provision.
As part of a tax-saving programme, the Swiss parliament has already restricted the possibilities of buying into providential schemes. Talks are also currently under way on proposals for a general payroll-based ceiling for occupational provision, and these will certainly be opposed by ASIP.
ASIP Schweizerischer Pensionskassenverband
President and delegate: Dr Hermann Walser
Address: Talstrasse 20, 8001 Zurich
Telephone: +0041 1 211 44 71
Facsimile: +0041 1 211 18 73
Contact: Gregor Ruh
Address:Bälliz 64, PO Box 1088, 3601 Thun
Telephone: +0041 33 227 20 44
Facsimile: +0041 33 227 20 45
Date formed: 1 January 1998 – after the merger of the five former Swiss staff providential associations.
Number of members: 1,580 public and private pension schemes.
The proportion of elderly people, defined as the percentage of men and women over 64 years of age relative to the number of men and women between 20 and 64 years of age, was 23.5% in 1990. By the year 2015, this proportion will have risen to around 35%, and by 2040 to approximately 45%.
The average remaining life expectancy of 60-year old men in 1990 was 19.1 years, and by the year 2010, this figure will have risen to 22.1 years. For women, the remaining life expectancy of 60-year olds will have risen over the same period from 23.9 to 27.5 years.
According to Swiss pension fund statistics, in 1998 there were around 11,000 providential schemes in Switzerland with assets totalling Sfr348.3bn.