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Social security Early retirements fuel pension system woes

Early retirement is no longer the exception at large Swiss companies

(Keystone)

The Swiss state pension system paid out CHF579 million ($600 million) more than it took in last year. A poor investment performance resulted in an overall loss of CHF559 million. The situation is not helped by a trend towards early retirement in large companies. 

The previous year, 2014, also saw greater costs than revenues, but the better investment performance meant a total loss was avoided. 

Compenswiss, the Swiss Federal Social Security Funds, blamed unfavourable market conditions. The scrapping of a franc-euro exchange rate ceiling by the Swiss National Bank (SNB) on January 15, 2015, had a negative effect, it said, with a lot of money being spent on currency hedging. 

In addition, Compenswiss said the SNB’s policy of negative interest rates was also expensive. 

Around three-quarters of pension contributions are made by employers and employees – the rest comes from the state. But, as Swiss public television, SRF, reported on Tuesday, early retirement is no longer the exception but the rule for large Swiss companies. 

It is argued that this trend could cause problems for the economy by increasing the burden on the social security system – especially as people are living longer. In addition, keeping experienced employees around to train apprentices is also essential to sustaining a skilled workforce. 

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The Swiss average for early retirement is around 30%.

swissinfo.ch and agencies


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