SWITZERLAND - More than 75% of employers in Switzerland contribute more to their occupational pension funds than is required by law.

Since the introduction of the mandatory second pillar in 1985, employees and employers equally share a 8.4% contribution to occupational pension funds.

However, if both parties agree contributions to the pension funds can be raised for either both employees and employers or only one of them.

"Two-thirds of employers are contributing more to their pension funds than they are obliged to under the mandatory regulations," Hanspeter Konrad, director of the Swiss pension fund association ASIP, said at a conference in Lausanne.

Contributions in this "above mandatory" (überobligatorisch) sector can climb above the 10% mark. And, in some cases, employers not only contribute half of that but up to two-thirds, Konrad added.

"Politically, we will have to make sure this 'above mandatory' sector will not be cut in future," Heinz Allenspach, former MP and member of the employers' association, noted.

"In future, this sector will become more and more important for retirement provision," he explained.

The first pillar pension system AHV currently has a CHF1bn (€590m) surplus with income of CHF32bn and payments of CHF32bn. However, it is expected this surplus will turn into a deficit by 2015 because of demographic changes, Allenspach explained.

Debates are ongoing about an increase to the currently statutory retirement ages of 64 for women and 65 for man.

"It is likely we will see a one-year raise of the retirement age for women," Allenspach noted. He could also see both retirement ages raised to 66 in future.

Another measure currently under discussion is the question of whether to link pensions both to wage and price inflation or price inflation only, in the hope adjustments will help cope with future deficits in the first pillar.

Companies paying 'above mandatory' contributions are said to be using pension arrangements as a way of making themselves more attractive to employees.