The business community and employers say pension payments must be reduced as a result of an ageing population and lower capital gains on pension funds.
Voters will have the final say in March on the proposal to lower the minimum percentage rate used to calculate payments of the occupational pension scheme by about 0.6 per cent within six years.
The reduction of the conversion rate is a necessary step to ensure the future of the pension scheme for the younger generation, according to Gerold Bührer, president of the Swiss Business Federation.
He criticised trade unions, which have forced a referendum on the issue, of running an unfair campaign by blaming the business community for trying to deprive contributors to the pension scheme of their financial share.
For his part, Rudolf Stämpfli of the Employers Association warned that failure to adapt the conversion rate would force pension funds to make riskier investments to secure the financial stability of the insurance scheme.
Trade unions, consumer groups and centre-left parties have challenged the reform to a nationwide vote on March 7. They say a reduced rate is unacceptable and accused private insurance companies of seeking to benefit at the expense of individuals.
However, the government as well as the main centre-right and rightwing parties have come out in favour of the reform.
The occupational pension scheme is part of Switzerland’s three-tier retirement funding system, along with the state old age pension and private saving schemes.
The conversion rate presently is 7.05 per cent for men and 7.0 per cent for women. The reduction – the second within four years – would come into force gradually by 2016.
Urs Geiser, swissinfo.ch with agencies