SWITZERLAND - The Swiss Federal council has increased the first pillar old age, survivor and disablement pensions, known as AVS-AI, by 1.9% in a bid to “to adapt pensions to economic developments”.

The boost, which will take place on January 1 2005, is going to cost an extra 722 million francs (466 million euros).

AVS-AI are indexed against the ‘mixed index’, which corresponds to the arithmetical average of the wage-index and price–index. Pensions are compared to the index every two years and comparison took place in 2003.

In 2003 the price-index rose 0.6 % and the wage-index to 1.4 %, while the growth of both indices is estimated to be 0.8% by December 2004, said the office for social security in a statement.

The minimum monthly payment for old-age pensions is set to rise from 1,055 to 1,075 francs, while the yearly AVS-AI pensions will go up from 17,300 francs to 17,640 francs for a single pensioner and to 26,460 for a couple.

Earlier this month, the federal council said it would raise the minimum guaranteed interest rate for occupational pensions to 2.5% from 2.25%.