On 22 September 2024, Swiss voters will have their say on an amendment to the federal law on retirement, survivors’ and disability pension plans (BVG/LPP).
In brief
For many people, an occupational pension (2nd pillar) is an important supplement to a first-pillar old-age and survivors’ insurance pension (OASI/AHV/AVS). During their working lives, their salary contributions and the contributions from their employers accumulate as retirement assets in a pension fund. These assets will eventually be used to pay an occupational pension. Up to a certain income, the law requires a minimum amount of pension money to be paid out for each franc saved. However, because of low returns on the financial markets and rising life expectancy, pensions in this mandatory part of the occupational pension system are no longer adequately financed. This particularly affects pension funds that only offer the statutory minimum or a bit more. There is also a second problem; those who do not earn very much to begin with receive little or no occupational pension. This affects a disproportionate number of women, because they often work part-time or in low-wage sectors.
The reform provides for measures to finance future pensions more securely. In addition, many low earners will receive a higher pension when they retire; both they and their employers will pay higher monthly contributions than they do today. Most employees have a pension fund that offers significantly more than the statutory minimum benefits. As a result, the reform will have little impact on them. The pensions paid to people who have already retired will not be affected by the reform.
Last modification 06.08.2024
