Sections

Switzerland sets indexation at 2.7%

Related images

  • Switzerland sets indexation at 2.7%

SWITZERLAND - All mandatory second pillar pensions paid out since 2006 will get a 2.7% indexation, the Swiss government has decided.

According to the law on occupational pensions, known as the BVG, pensions have to be increased from the third full year after they have first been paid out to account for inflation.

The indexation level is set by the Swiss federal ministry for social insurance, BSV, by looking at the consumer price index developments over that period.

After the first indexation, the pensions are then linked to the schedule for indexation of first pillar pensions, AHV, which is every other year.

So from of January 2010, all payments first paid out in 2006 will be raised by 2.7%.  

The figure equals the percentage change of the consumer price index between September 2006 and September 2009.

The indexation for pensions first paid out in 2005 had been set at 4.5% one year ago.

The indexation for pensions before that period was also renewed at that time and set at 2.9% for people who began to receive payouts in 2004 while pensionholder before that date received 3.7%.

Taking an "indexation holiday" was part of the proposals put forward in the recovery plans of several Swiss pension funds. (See earlier IPE story: Swiss rail fund recovery go-ahead under new chief and Luzern fund recovery gets go ahead)

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

 

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • IN-2454

    Closing date: 2018-08-01.

Begin Your Search Here