The Swiss Federal Ministry of Internal Affairs is to start an administrative investigation after pension and social security costs were overestimated by CHF4bn (€4.3bn).

The Federal Social Insurance Office (FSIO), which oversees the functioning of the social security system, and is responsible for old-age and survivors’ insurance (OASI), invalidity insurance, supplementary benefits and occupational benefits of pension funds, spotted the mistake while conducting checks linked to the implementation of the 13. AHV-Rente, a 13th month of pension that will be paid from 2026.

The FSIO found that AHV expenditure appeared “implausibly high in the long term”, it said.

Expenses were overestimated by around CHF4bn in 2033, at first glance, as a consequence of “two incorrect mathematical formulas” used in the model to calculate the financial trajectory of the AHV, the government said.

This changes the forecast on the medium to longer-term development of the financial situation in the first pillar, with the difference between income and expenses to grow to around CHF4bn by 2033, instead of over CHF7bn estimated previously.

Lower expenses mean the government’s contribution to the first pillar will reduce cumulatively, over the period 2026-33, by approximately CHF2.5-3bn, it said.

The FSIO promptly reacted to the mistake, by starting to develop two alternative models to re-estimate AHV expenditures for the next 10 years, and commissioning two external research institutes to develop spending models to make new projections and calculation models plausible, it added.

The calculations from the two external institutes will validate the new models. The FSIO will publish a new, corrected outlook for the AHV in September.

The results of the investigation, ordered by internal affairs minister Elisabeth Baume-Schneider, are expected at the end of the year, the government said.

Through the investigation, the government and the FSIO will assess the quality and the efficiency of the processes used to draft financial forecasts for the first pillar AHV, to understand whether mathematical models are reliable, it added.

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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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