SWITZERLAND – The CHF31bn (€19.9bn) public employees’ pension fund Publica could switch to defined contribution in 2008 with parliament poised to discuss a law that would change the fund’s organisation.
For the time being the fund offers defined benefit pensions, but this could change in the next three years, if parliament passes a “special law” regarding Publica alone, in the autumn session.
The measure would encompass two other issues: a change of the “technical interest” on pensions from 4% to 3.5%. This could influence the fund’s solvency ratio. Another issue would involve a rationalisation of the number of pension accounts within the fund.
Every employer would also be allocated an individual balance sheet/record as well as a contribution account, explained Publica’s director Werner Hertzog.
In its first-half result for 2004, published earlier this week, Publica said its capital value has reached CHF 31bn with 4.9% returns and a solvency ratio of 104,5%.
The money is going to be used for “resetting and reserves”. CHF152.8 m has been allocated to increase provisions for longevity while CHF87.2m is for provisions for changes in death and disablement risk.
Publica, known as Pensionskasses des Bundes or PKB until it became an independent entity in July 2003, started operating independently in 2004.
Meanwhile, the Swiss Federation of Trade Unions, SGB, has started a campaign to collect 100,000 signatures to trigger a parliamentary vote on flexible retirement, which would allow workers to retire at 62 with a full pension.
The SGV has until the end of the year to change the rules, which allow men and women to claim their state pension at 65 and 64 respectively. So far similar initiatives to introduce flexibility have failed.