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Pension reform compromise put to consultation

Employee working on assembly cell of a testing system.
There is widespread agreement that a reform of the Swiss pension system is necessary because of rising life expectancy and lower investment income. © Keystone/Christian Beutler

The government has presented plans for a reform of the compulsory occupational pension scheme – one of the three pillars of the Swiss social security system.

It foresees a reduction of the so-called conversion rate from 6.8% to 6% – which will result in 12% drop in individual pensions – as well as a solidarity-financed pension supplement for future pensioners and improvements for lower-income earners and part-time employees.

The proposal is in line with a compromise reached by Switzerland’s main employer’s association and trade unions earlier this year.

Interior Minister Alain Berset said the reform was aimed at shoring up the ailing occupational pension system and would cost about CHF3 billion ($3 billion).

“It is a compromise and the result of long negotiations. The government therefore hopes the proposal will stand a good chance of winning broad support,” Berset told a news conference on Friday.

The reform of the occupational pension system is a top priority for the government over the next four-year term.

Berset added that the government would review the proposal following a three-month consultation period among political parties, organisations and institutions and, in a best-case scenario, parliament could begin discussions on a legal amendment in 2021.

However, he acknowledged that the reform plan will meet mixed reaction and be challenged by various stakeholders, notably the influential association of small and medium-sized entreprises.

An overhaul of the state old age pension scheme – the so called first pillar – is already underway in parliament following voters’ rejection of a previous reform in a nationwide vote more than two years ago.

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