The social security and health committee (SGK-N) of the National Council, the lower house of the Swiss parliament, has closed the gaps on critical points established by the Council of States, the upper house of the parliament, on the reform of the second pillar pension system.

The committee has voted in favour of the model proposed by the Council of States to compensate the generation hit by the reduction of the conversion rate used to calculate pension pay-outs – Umwandlungsatz – from 6.8 to 6%, it said on Friday.

Last December, the Council of States approved compensation measures for 15 cohorts that should receive a lifelong pension supplement for the reduction of the conversion rate.

The Council of States intends to improve mainly the situation for part-time workers and low earners through the measures laid out in the reform of the second pillar approved in December.

Half of the members part of the so-called transitional generation, moving from one system to another after the reform, would benefit from the pension supplement, according to the Council of States, compared with 35-40% that would benefit with a model put forward by the National Council.

The SGK-N is also in favour of lowering the mandatory threshold to become a second pillar member by a fifth, instead of half of the amount of wage deduction to determine a salary insured in the second pillar – Koordinationsabzug – as envisaged by the National Council.

Currently, people have to earn at least CHF22,050 per year, the minimum wage considered the threshold, to become second pillar members. The threshold proposed by SGK-N aims to protect people with lower incomes, and with deductions suddenly increasing, and people with multiple jobs.

For the same reason, the majority of the SGK-N is insisting on a fixed deduction for the Koordinationsabzug, distancing itself on this point from a 15% deduction proposed by the Council of States.

Parliament could vote on the reform of second pillar occupational pensions (BVG) in the session in March, according to reports.

The Swiss Federation of Trade Unions, SGB USS, plans to hold a referendum against the second pillar reform discussed in parliament, said Pierre-Yves Maillard, president and member of the Social Democratic Party (SP) in the National Council, in an interview.

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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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