How we could close the pension gap

Starting a new start-up at the age of 60? Or maybe go back to school at 70 to learn something completely new? Who knows, maybe in 10 years we will also be living in such a hybrid reality, partly as a human and partly as an avatar in some metaworld that we control from the couch, supported by artificial intelligence in the form of a super smart and perfectly trained artificial intelligence ChatGTP , which not only follows our wishes, but can also anticipate them directly.

What is certain: statistically we live longer and healthier, the FSO estimates that of people born in 2017 approx. 15% of men and one in four women live to be 100 or older. By comparison, for those born in 1967, the expected rates are still 4% and 11%, respectively.

With the increase in life expectancy, new life and work models become possible and perhaps absolutely necessary if the money is simply not enough for a longer life. It is equally important that pension systems are adapted to current ways of living and working, so that e.g. to meet. Reforms are needed at all levels and much is being done. Particularly with the third pillar, there would be opportunities to improve the pension situation for many of us with more flexibility. There are already a number of initiatives for this; here’s what you need to know about it.

be today 73% (1.7 million) of part-time workers in Switzerland are women and according to the BFS (2020), they do 50% more housework and family work than men (28.7 hours versus 19.1 hours per week), with men steadily increasing (in 2010 it was 16.2 hours per week).

It is precisely for these living conditions that the pension system poses a number of challenges, particularly in the second and third pillars. Here are some examples:

The pension gap between men and women the gap resulting from lower wages and lower workload combined with longer life expectancy (in Switzerland, women currently live about 4 years longer than men) in relation to pension provision is also included 34.6% in Switzerland, higher than the OECD average of 26%.

If you look closer, you see that it is there are significant differences in the three pillars. The HSG study “Women’s and old-age provision” (2021) shows, for example, that the AHV has a gap of 0.46%, while the second pillarcompany provisions for pensions, 40% Are. With an average pension of CHF 1,398, women receive 40% less pension from the occupational pension scheme than men with CHF 2,346. This is evident from the new pension statistics of the FSO Women also have on average 27% less assets in pillar 3a than men.

According to Nils Aggett, president of the Swiss pension association, there are also differences when it comes to investing:

What has long been possible at AHV and pension funds could also become reality for Pillar 3a: pension gaps, which are caused by career breaks, for example, to conclude with additional purchases.

The motion to make purchases in Pillar 3a, tabled in 2019 by State Councilor Erich Ettlin, found support in 2020 and was accepted by the Council of States and the National Council.

It states “that people with an AHV income who were unable to pay any or only partial contributions for Pillar 3a in previous years are given the opportunity to make up for this and can deduct it in full from their taxable income in the purchase year. (so-called 3a purchase). The shopping possibilities must be limited in terms of time and money”. So in the design of a purchase z. B. are only possible every 5 years, the amount is limited to a maximum amount and all advances already made are deducted from the maximum purchase amount. Details about the motion here.

This shows how this can affect Calculation example: According to the Association’s calculator, a 45-year-old woman who has been able to deposit a total of CHF 30,000 into Pillar 3a over the past 20 years could top up her pension plan in that year with a maximum of CHF 35,280 into Pillar 3a of purchase. You can calculate what this amount looks like for you with the calculator.

A possible point of criticism of the more flexible procurement in Pillar 3a is that not everyone can afford to contribute to private provision at all.and the new additional shopping opportunities, especially for those who are already well off.

The future will show how practical the solution is for all of us to implement if procurement can take place every 5 years: If you don’t have the amount on the high side, you’ll first need to accumulate the money in some way over time in a savings account or otherwise to prepare for the purchase.

How do you see it: Does the possibility of additional purchases in pillar 3a help? What other measures would be most helpful for all of us to be financially prepared for life to 100? 😉