LPP reform: use reserves rather than payroll deductions

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In its message, the Federal Council unfortunately retained for the reform of the LPP the variant proposed by the Swiss Employers’ Union, the Swiss Trade Union and Labor. Swiss. The two models have this in common that they advocate an immediate reduction in the LPP conversion rate to 6% and adjustments in the benefit plan.

Only 14% of policyholders will be affected by the expected drop in this conversion rate. These are in particular employees of the construction and gastronomy sector. In order for the level of BVG pensions to be maintained with a reduced minimum conversion rate, the insured must accumulate a proportionately higher retirement savings. The reduction in the coordination deduction is one of the means that would make it possible to achieve this objective, because it makes it possible to increase the insured salary. Thus, the provident situation of low-wage insureds would be markedly improved. People working part-time – often women – would benefit from our project. Our reform model generally guarantees that the level of pensions is maintained despite the reduction in the minimum BVG conversion rate – without additional payroll deductions. Because these different models stand out in particular in the design and financing of the compensation measures necessary for the generation of transition close to retirement.