Retirement provision

Building up “money for the future”

The Swiss retirement provision system is considered very good and secure when compared on an international level. However, the failure of the “Pensions 2020“ package of reforms on 24 September 2017 poses major challenges for our system.

Increasing life expectancy and ongoing low interest rates

When founded in 1948, the AHV pensions scheme considered male life expectancy of men aged 65 to be twelve years and 14 years for women, whereas the same figures today total more than 19 and 22 years respectively for today’s 65-year olds. The proportion between contribution payers and those in receipt of contributions is worsening in the AHV as a result of a combination of increased life expectancy and lower birth rates. As for employee benefits, the combination of increased life expectancy and reduced investment returns due to a high conversion rate is leading to a redistribution from actively insured persons to pension recipients in a manner which is quite alien to the system. The increase in life expectancy due to medical advancement is great news, but when combined with continually low interest rates, it does put retirement provision into a difficult position. The Federal Council’s “Pensions 2020” reform package was their way of countering this trend. The no vote at the ballot box is now impeding our swift departure into quieter waters.

Private provision is becoming ever more important

The issue of secure financing for the AHV and pension funds remains unresolved. The pressure to rapidly find new solutions is mounting. The fact is: getting pension provision back on track requires us all to pay higher AHV and pension fund contributions as well as to face staying longer in employment and receiving fewer benefits during retirement. A comprehensive reform to stabilise pension provision is essential.

Let’s pull out all the stops where we can make an impact: private, voluntary provision from the third pillar has always been important and is becoming ever more significant in light of current circumstances. Even small but regular contributions can make a valuable difference to enjoying a financially worry-free retirement. It is never to late to start building a pension. Life insurance savings plans enable you to close gaps in retirement provision while providing financial security for your dependants in the event of your death.

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