Swiss Pension Reform Rejected
On September 22, 2024, the Swiss electorate overwhelmingly rejected the proposed reform of the occupational pension system (BVG Reform), with 67% voting against it. The reform aimed to address several issues within Switzerland’s second pillar of pension savings, specifically targeting long-term financial sustainability and improving coverage for lower-income and part-time workers.
Key elements of the proposed reform included:
- Reduction of the Minimum Conversion Rate: The conversion rate, used to determine pension payouts from accumulated savings, would have been lowered from 6.8% to 6.0%, reducing the overall pension benefits for retirees.
- Lowering the Entry Threshold: The threshold for mandatory inclusion in the pension system would have been lowered, enabling an estimated 70’000 additional low-income and part-time workers to participate in the second pillar system.
- Adjusted Coordination Deduction: This would have led to higher insured salaries for low-income workers, thereby increasing their pension contributions and eventual benefits.
- Compensation for Transition Generations: To offset the negative impact of the lower conversion rate on older workers, a transitional scheme offering pension supplements was proposed, capped at 200 CHF per month depending on the individual’s age and accumulated savings.
- Equalizing Contributions: Contribution rates between younger and older workers would have been adjusted, slightly increasing the contributions of younger employees while reducing those of older employees to ease their burden on the job market.
Despite these adjustments aimed at stabilizing the system, critics argued the reform disproportionately harmed certain groups, particularly through reduced benefits for future retirees, which ultimately led to its rejection.
This information about the rejection of Swiss pension reform is provided by WHP, Asinta’s employee benefits consulting Partner in Switzerland. If you need support with your benefits program in the country, please contact us, and we will connect you with the local experts at WHP.