Last update: 27.06.2017 18:15
Answering this question is anything but trivial.
Whether you consider yourself a winner or a loser depends on personal factors.
For example, your age, gender and income.
And last but not least, your attitude.
How do you see yourself?
Basically, everyone wins because it is a step in the right direction and improves the financing of pension obligations, i.e. the system.
What exactly is happening:
The AHV, the basic insurance scheme, is financed on a pay-as-you-go basis and is fed by contributions on earned income and an allocation from VAT.
This covers the expenditure on benefits.
In the past, this worked well because the baby boomers paid in “a lot” and there were “few” pension recipients.
This enabled AHV pensions to be financed at the current level.
As life expectancy increases and the birth rate decreases, both the income side decreases and the expenditure side increases: the gap is widening inexorably and the AHV has had a funding deficit since 2014.
This means that income no longer covers expenditure.
Even in the second pillar, the occupational pension scheme, the pension promises to current and future pensioners are not sufficiently covered by their retirement assets because life expectancy has increased significantly and the level of returns has also fallen.
As a result, pensioners are now being cross-subsidized by those in employment.
How does this happen?
The BVG retirement assets are converted into a pension by the pension funds at the legally prescribed conversion rate of currently 6.8%.
In order to meet these obligations, many pension funds have paid and continue to pay out the returns earned on the assets of employees as payments to pensioners.
Employees receive a lower return credit on their retirement assets, i.e. lower than the return that the pension fund has actually achieved on its capital.
The extent of the redistribution is estimated at around CHF 5.3 billion for 2015 – although the pension funds have introduced countermeasures.
This redistribution contradicts the principle of the funded 2nd pillar.
Other effects such as excessively high technical interest rates, investment strategy and the low interest rate environment also contribute to these so-called “retirement losses” from the pension fund perspective.
The phenomenon of pensioners in the 2nd pillar being cross-subsidized by employees in the same pension fund has been occurring for around 10 years.
The 2nd pillar regulations are therefore also in need of restructuring.
- Those born in their mid-50s, i.e. “shortly” before the normal retirement age, receive an increased retirement pension of CHF 70 per month without having made equivalent AHV contributions during their working life.
- Women, part-time employees and people with low incomes or multiple employers – they also benefit from the CHF 70 pension supplement as well as the reduced entry threshold into the 2nd pillar and the simultaneously increased insured BVG salary.
Those earning between around CHF 21,000 and CHF 53,000 benefit in particular; around 2/3 of insured persons in this salary range are women. - Insured persons over the age of 45 receive a pension guarantee for the current BVG benefit level as a “transitional generation” to protect their vested rights.
The guarantee is financed from the BVG Guarantee Fund – which in turn is fed by employees via pension funds. - Married couples and couples in registered partnerships, for whom the pension cap in the AHV will be raised from 150% to 155%.
- All current AHV and BVG pensioners – they will continue to benefit from their current AHV and pension fund pension level and unchanged high conversion rate, without having to bear a relevant restructuring burden due to increased life expectancy.
However, they will not receive the AHV pension increase
But it is also true that it is mainly younger policyholders who are losing out. The
communication is more or less transparent.
Experts have determined in a comprehensive study that the reform does not go far enough to establish a stable, sustainable system that takes sufficient account of demographic developments.
Critics find it disturbing that for the first time in 70 years of AHV history, the AHV pension adjustment only benefits one group, the new pensioners, and that the population group best represented in parliament – financially well-off, mostly married baby boomers in the 45 to 65 age group – benefit the most.
Well, half of all voters are over 50 years old, they benefit from the reform.
Younger people are generally not as interested in old-age provision and their children are not being asked.
These groups bear the burden of this reform, they pay off the mortgage.
Indexing the retirement age, for example, was not on the agenda for this reform of the social security system.
- AV2020 does not fully solve the AHV’s financing problems.
Even after the reform, the funding of the benefit commitments is still not 100% covered.
The funding gap will only be reduced from 170% of annual economic output to around 135%. - For younger BVG insured persons, the conversion rate is not falling as much as it should in order to sustainably finance the BVG pension commitments already made.
The expectations of younger insured persons regarding their future BVG pension are too high.
In addition, you are financing the pension guarantee of the transitional generation.
Furthermore, you will have less net from gross because your BVG contribution will increase, which you will inevitably use to build up your personal retirement assets. - You have less net income because your AHV contribution increases.
- Due to your young age, you will pay higher VAT for longer than older people who draw their AHV pension from this financial contribution.
So, how will you vote? From a social perspective, the reform is necessary. Whether you find this or perhaps a future reform balanced is up to you to decide.
One thing is certain: the population continues to age.
This means that the ratio of recipients to payers will continue to change.
It is fairly certain that this will not be the last pension reform and that the issues of a higher retirement age, improved pension financing, pension levels and therefore prosperity in old age and the conversion rate will come up again.
