Sign the referendum against the reform of the 2nd pillar!

After the AHV revision, which was voted on September 25, 2022, the 2nd pillar is now the new construction site for old-age provision. After intensive negotiations between employers and trade unions (on the one hand the Swiss Employers' Association, on the other the Swiss Federation of Trade Unions and Travail.Suisse), a clever compromise solution was found: The conversion rate, on which the pension depends, would have been lowered, but with a guarantee of the pension level in the BVG mandatory scheme and an improvement in pension protection for people with low incomes and for part-time employees. A solidarity-based salary contribution (0.25% for employees, 0.25% for employers) was planned: It would have been levied on income up to CHF 850,000 and would have made it possible to simultaneously raise the pensions of low earners and prevent the pensions of the middle classes from falling. The highest incomes would have financed this social measure through a modest salary deduction (for the above-mentioned salary maximum it would have amounted to CHF 2125 for employees and CHF 2125 for employers). The Federal Council adopted this proposal, which was negotiated by the social partners. Unfortunately, the fact that the highest incomes would have had to accept a small deduction seems to have made the middle-class parties (Center, Green Liberals, FDP and SVP) sick to their stomachs. As a result, they preferred to torpedo this compromise in the deliberations of the two chambers of parliament.

A shameful dismantling

Not only did these parties not want to accept this gesture of solidarity in favor of the less well-off, on the contrary, they took pleasure in making life even more difficult for them. In fact, the conversion rate is to be lowered from 6.8% to 6%, which corresponds to a reduction of 11% in the pension amount without any compensatory measure, while the minimum income for compulsory pension fund contributions is to be lowered from CHF 22,050 to CHF 19,845. At first glance, one might find it gratifying that people with lower incomes are paying into the 2nd pillar and thus improving their pension, but those who wish to do so can already do so at their own discretion anyway (incidentally, the SMV proposes solutions that are tailored to their personal situation, for example for freelancers), while the others, whose income is below or close to the poverty line, cannot do so because they lack the means to do so. One might ask what the point is of forcing these latter people to save for the 2nd pillar. If, at the time of retirement, pensions and income are not sufficient to cover basic needs, there is support from supplementary benefits. With a reduced conversion rate, a BVG pension that is too low for low incomes will probably not help, except that the cantonal compensation funds, which are responsible for supplementary benefits, can save on the backs of low earners.

The financial sector benefits

Not only does this reform not improve the situation of low-income earners, but the middle class will also be affected by a reduction in pensions and lower purchasing power at retirement age, as well as increased contribution payments, as the conservative parliamentary majority has also decided to drastically reduce the coordination deduction. Employers deduct AHV and pension fund contributions from wages. To ensure that the pension funds only levy contributions on the salary components that are not insured by the 1st pillar, there is the so-called coordination deduction, which corresponds to 7/8 of the maximum AHV pension. On January 1, 2023, this was CHF 25,725 per year, an amount that is deducted from the annual gross income to calculate the contribution for the 2nd pillar. The right-wing parties are demanding a change to this calculation: the coordination deduction is to be set at 20% of the salary subject to AHV contributions, which would flush 2 billion additional contributions into the coffers, with a particularly brutal increase for low incomes. All this despite the fact that pension fund assets currently exceed 1000 billion, a colossal sum that is still growing (it has almost doubled in twenty years), while benefits are falling. This is a huge source of profit for the financial sector and insurance companies (which take up to 10% from the earnings of those insured under the BVG* and charge CHF 7 billion a year for their administrative costs). The President of the Swiss Federation of Trade Unions (SGB), Pierre-Yves Maillard, is of the opinion that the right is trying to reduce the benefits of the 2nd pillar so that people pay into the 3rd pillar, which is even more lucrative for the financial sector.

In the referendum campaign before the AHV vote last year, the right-wing majority promised to improve the situation of women and pensioners in the BVG revision. In view of the unconvincing result, to say the least, the trade unions (including the SGB, to which the SMV belongs) and the left-wing parties decided to launch a referendum, while certain sector-specific employers' associations are also opposed to the reform.

Information and the opportunity to sign the referendum at: https://rentenabbau.ch

*see the study on this topic The lost billions - The profits of life insurers in the 2nd pillar by Matthias Kuert Killer, Travail.Suisse, 2014, 2nd edition 2016