The reform of the second-pillar pension system in Switzerland can lead to a review of the pension plan of the Aargauische Pensionskasse (APK), the CHF12.5bn (€12.7bn) pension fund for the employees of the canton of Aargau, with significant consequences in terms of costs for employers with a higher number of part-time employees.

APK will have to review its employer contribution, set to define the amount of wage insured under the first and second pillars, which is still calculated according to the old cantonal plan, or depending on workload, it said.

Savings contributions for pension plans applying an old employer contribution, or a contribution calculated according to workload, could be below the new minimum amount set by law of CHF2,160 per year, it added.

The reform of the second pillar pension system, which is facing a referendum on 22 September, aims to improve protection for employees with lower incomes and part-time workers.

The rules will lead to an increase in the number of pension fund members, by reducing the wage threshold to join pension schemes, and to a higher share of the salary insured under the second-pillar system.

The new threshold affects almost all members and employers, APK said, leading to higher costs for occupational pensions and additional administration.

The new pension plan introduced by APK earlier this year already meets the minimum requirements set out in the second-pillar pension reform, so that part-time employees and low earners are insured accordingly.

The employer contribution for APK members is 25% of the wage insured under the first pillar, according to the new pension scheme’s plan, against 20% of the wage according to the reform.

APK’s latest pension plan foresees a minimum amount of savings contributions per year of CHF10,125, against CHF6,720, if the reform is approved in the September referendum, it said.

The pension fund plans to finance the compensation for the reduction of the conversion rate to calculate pension payouts, either by cutting the interest rate on savings of members still working, or at the expense of the funding ratio. Employers will not be affected by the compensatory measures, it added.

The reform will cut the conversion rate to 6% from the current 6.8%.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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