Before the BVG reform after the AHV vote. In its winter session, which began at the end of November, the Council of State is discussing professional retirements. The essence of reform is to lower the conversion rate. It should decrease from 6.8 percent to 6 percent. This means that for every CHF 100,000 you save in retirement capital, there is only CHF 6,000 in annual pension instead of CHF 6,800. As the number of pensioners living longer in Switzerland is increasing, a reduction to 4.5 percent would actually be appropriate. It simply cannot be applied politically: 60 percent of those who vote are over 50. As a result of your power at the ballot box, the federal government of Bern offers generous compensation to transitional generations for the small drop in conversion rate. The active insured has to finance it.
The original proposal of the Federal Council provided compensation of CHF 30 billion. At the end of 2021, the National Council reduced the subsidy package to nine billion francs. The State Council Social Commission increased this amount to eleven billion.
Improvements are also planned for the active insured: The entry threshold, which is currently 21,510 CHF, will be lowered to CHF 12,548 as recommended by the Federal Council and the National, but at the will of the Council of States Social Affairs Commission. Council, but only for CHF 17′ 208 francs. 140,000 low-income residuals instead of 320,000 will now be insured in a pension fund.
Discount should be halved
The coordination deduction that determines the insured’s salary will also be reduced. 24,885 CHF today. The Federal Council and the National Council wanted to reduce the deduction to CHF 12,548. The Social Commission wants to make it income dependent. The AHV must be 15 percent of the responsible salary. For example, with an annual salary of 40,000 francs, instead of, say, 15,000 francs, 34,000 francs would now be insured.
These measures are particularly in the interest of part-time workers and therefore above all women: 26 percent of workers in Switzerland derive their income from flexible employment – 63 percent of them are women. Is this model suitable for the majority? “This should be the case with councils,” says Hannes Germann, 66, vice-president of the social commissioner. “Another question is whether there will be a majority in the referendum. Reducing the conversion rate remains a major hurdle.”
Germann welcomes the improvements for low-income and part-time workers. “Until now, employers pay a lot for high incomes and little or nothing for low incomes. That needs to change.” But resistance can be expected here too: “Industries that employ large numbers of part-time workers, such as gastronomy, tourism or sales, should expect higher employer contributions. Therefore, they may form an unholy alliance with competitors with a lower conversion rate.”
Pension reform is far from dry. The sequel is coming.