BVG revision is key to sustainable pension provision

The BVG revision amends the Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans from 1982. There are three core concerns: firstly, the unfair cross-financing of pensions by those in employment should be stopped, and secondly, pension gaps for women and part-time workers in the occupational pension scheme should be closed. Finally, the position of older employees on the labour market is to be strengthened. In this way, the reform of the occupational benefit scheme creates greater fairness and leads to a safeguarding and modernisation of the BVG as part of the three-pillar model.

Reform brings greater intergenerational fairness
A central aim of the BVG revision is to correct the excessive burden on those in employment. Due to increasing life expectancy, people in employment are no longer just saving for themselves, but their earnings are being used to cross-finance pensions. To eliminate this injustice, the minimum conversion rate for mandatory insured BVG retirement assets will be reduced from the current 6.8 per cent to 6.0 per cent. The minimum conversion rate indicates how the retirement assets are converted into a lifelong annual pension. If the conversion rate is 6 per cent, this results in a pension of CHF 6,000 per year for a capital of CHF 100,000. The existing pensions will not be affected.

The transitional age groups affected by the reduction in the minimum conversion rate will be generously compensated as part of the reform. Although only around one sixth of the working population is directly affected by the reduction in the conversion rate, around 50 per cent of the transitional generation (over 50) will receive a "pension boost". The transitional generation refers to the 15 years before normal retirement. This is an act of solidarity with all insured persons with low pensions.

Women, part-time employees and employees with low incomes will benefit
The planned revision also closes pension gaps that primarily affect women and people on low incomes. Specifically, this will be achieved by lowering the entry threshold (minimum insured salary from which you are compulsorily insured in the second pillar) from CHF 22,050 today to CHF 19,845. This will increase the number of BVG insured persons in one fell swoop. It is important to note that the employer also pays. It pays at least 50 per cent of the contributions that go into the insured person's BVG account.

In addition, the so-called coordination deduction, which is used to determine the salary insured with the pension fund, will be adjusted. Today, a fixed coordination deduction of CHF 25,725 is deducted from the annual salary; with the reform, the system is to be changed and the coordination deduction will now amount to 20 per cent of the AHV-insured salary. As a result, a much larger proportion of lower salaries will be insured under the BVG. Pensions will increase.

Increased employability of older employees
Finally, the BVG revision strengthens the position of older employees on the labour market by reducing non-wage labour costs. At present, the BVG contributions payable rise sharply with age, which means that older employees become increasingly expensive for their employers. This is another reason why older employees have fewer opportunities on the labour market and generally remain unemployed for longer.

The BVG revision therefore reduces the contributions of older employees. At the same time, the system is being simplified: instead of the current four different contribution rates, the reform provides for two: For example, the BVG contribution rate will now be 9 per cent from 25 to 44 years of age and 14 per cent from 45 to 65 years of age (instead of the current 18 per cent for employees over 55). Overall, the BVG contributions will be equalised over the working life.

Conclusion: A sustainable and fair pension scheme
The aim of the BVG revision is to make the Swiss pension system sustainable and fair. It addresses the current social and demographic challenges and lays the foundation for sustainable pension security. Voting in favour of the BVG reform will help to strengthen the tried-and-tested Swiss pension system and preserve it for future generations.