Many of the associations and stakeholders that commented on the amended draft of Switzerland’s Altersvorsorge 2020 (AV2020) pension reform package have dismissed the idea of a general pension increase.

At the beginning of November, a commission advising the smaller chamber of the Swiss parliament, the Ständerat, had recommended re-introducing a blanket increase of first-pillar pensions (AHV) to compensate for cuts in the second pillar.

However, in a statement on the new draft by the SGK-S, the “Vorsorgeforum” consisting of associations from the pension fund sector such as the ASIP, the chamber of pension fund experts and the association of actuaries rejected this proposal.

“Any compensation made necessary by second-pillar cuts needs to happen in the second pillar,” the joint statement notes.

“The proposed top-up for new retirees would create a two-class system for pensioners and fundamentally contradict the role of the AHV as a social insurance.”

Similarly, the federation of businesses (sgv) and the farmers association (SBV) have joined forces to present “a compromise model”, as they put it in their press release.

They propose a 10% increase to first-pillar pensions, only to people with very low incomes, to be financed by a further increase.

“With this new solution,” the sgv and the SBV note, “young insured people and those in low-income segments are not burdened with massive additional costs in the AV2020.”

The associations also proposed leaving other parameters as they were, including the entry date into first-pillar savings and the calculation parameters for coordinating second-pillar contributions (Koordinationsabzug).

The SGK-S recommended people begin saving in the first pillar at an earlier age and that everyone save in the second pillar, even those with low incomes.

The “Vorsorgeforum” sees the widening of second-pillar coverage as a positive side of scrapping the “Koordinationsabzug” but noted it would increase costs for companies in their pension plans.

The pension associations applauded the SGK-S for removing the debate around a possible automatic increase in the retirement age from the draft.

“This is political wisdom,” they said. “Eventually, it has to be a political decision whether this question is to be put before the people together with the whole package, or whether the question of the retirement age is to be discussed at a later stage.”

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