The Swiss National Bank (SNB) has downplayed the impact of its policies on the country’s beleaguered pension funds, arguing that a “major part” of the system’s problems were of a “structural nature”.

SNB president Thomas Jordan, speaking at a University of Lucerne event earlier this week, said the true cause of the Swiss pension system’s woes were “regulation, the real economy and demographics”.  

“Central banks cannot solve such problems,” he said.

He said the SNB was aware that the current investment environment – “keyword, negative yields” – was “difficult” for Pensionskassen, but he argued that the central bank’s monetary policy of prioritising price stability had contributed to a “strong foundation” to build “economic growth and prosperity”.

Sustainable retirement provision, he added, would enable monetary policies to continue to have “full effect in future”.

Jordan also took pains to point out what he saw as a disconnect in the perception of the Swiss system.

“On the one hand, our three-pillar system is praised for its balance and resistance to crisis,” he said.

“On the other, there is a broad consensus that the current system must be adjusted to the realities of demographics and the financial markets.”

The SNB’s president also cited the AV2020 reform package as one of several possible ideas for the system’s future, and named the dean of Lucerne’s economics department, Christoph Schaltegger, as one of the experts who presented alternative concepts.

In an interview with the Notenstein La Roche private bank at the end of June, Schaltegger argued that, while the “right questions” had been asked during the AV2020 consultation phase, there was now a “lack of courage to take the right steps”.

Together with his colleague Lars Feld, Schaltegger called for an increase in retirement age, as well as boosting contributions to the AHV, either via salaries or VAT.

But he also warned about cross-financing between active and retired members in the second pillar, citing studies showing that every new retiree’s pension portfolio is around 20-30% short of full funding.

Jordan, in a speech marking the opening of Lucerne’s economics department, called on “all students, teachers and researchers” to help solve the problems in the retirement system. 

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