Pay in more to get less pension?
On September 22, 2024, Swiss voters will vote on the occupational pension reform (BVG reform). It aims to strengthen the financing of the 2nd pillar. Trade unions, the SP and the Greens have launched a referendum against it.
The bill to be voted on in September is a tough one: an SP Federal Councillor once again has to take a public stand against her own party, Maya Graf, a Green member of the Council of States and co-president of the women's organization Alliance F, is at the forefront of supporting a reform that is rejected by her party, and Esther Friedli, an SVP member of the Council of States and member of the GastroSuisse board, rejects the reform, as does the left. The fact is that the bill is very complex, but the Federal Council and parliament have been so vague about the details that the impact on pensioners cannot be reliably predicted. Musicians should reject the reform, as it will not bring them any financial benefits but will lead to a reduction in their pension.
Watering down the original reform idea
Following the failure of the "Pensions 2020" project in the 2017 referendum, the two pillars of the pension system were to be reformed separately. The reform of the first pillar ("AHV 21") has since been approved by the electorate and essentially consists of an increase in the retirement age for women and an increase in VAT. It can be assumed that the narrowly positive result of the vote was influenced by an alleged financial imbalance in the AHV, which turned out to be a blatant miscalculation by the Federal Social Insurance Office a few weeks ago. With regard to the reform of the second pillar, the Federal Council initially adopted a compromise proposal from the social partners: The financing of occupational pensions was to be improved by adjusting the minimum conversion rate. In order to maintain the pension level and provide better protection for people with low incomes and part-time work - including musicians - the coordination deduction was to be halved and a jointly financed pension supplement introduced. However, during the parliamentary process, the conservative parties quickly wanted nothing more to do with this. In the end, a reform was passed that deviated from the social partners' compromise on key points. In particular, the pension supplements, which should have compensated for the reduction in the minimum conversion rate and the pension fund pensions that had been falling for years, were massively reduced. Parliament has also abandoned the solidarity-based financing of these pension supplements. What remains of the original idea is mainly higher salary deductions and a lower minimum conversion rate (6 instead of 6.8%) - and therefore lower pensions for many insured persons, as the conversion rate determines how much pension you receive for the assets you have saved.
Pensions are falling despite good pension fund results
Pensions from pension funds are falling all the time. This is despite the fact that contributions have never been as high as they are now and the pension funds are doing very well. Their reserves and safety buffers amount to over 110 billion francs. With the BVG reform, pensions are to be cut by up to CHF 3200 per year. In the last three years, pensioners have lost over 5% of their purchasing power due to inflation. This corresponds to around CHF 100 per month for an average pension fund pension. At the same time, mandatory salary deductions are being increased. With the reform, employees would have to pay CHF 2.1 billion more into the pension funds each year. Wage costs will rise by up to CHF 2,400 per year. Pierre-Yves Maillard, President of the Swiss Federation of Trade Unions (SGB), of which the SMV is also a member, summarizes the problem succinctly: "Paying more for less pension - we must prevent this deceptive package." Today, banks, managers and experts are diverting over 7 billion from our pension fund assets every year. Asset management costs have doubled in the last ten years. They amount to CHF 1400 per year for each and every one of us. Experts also see huge savings potential. Over the last 20 years, insurance companies have made a profit of CHF 9 billion with the approval of parliament by offering expensive, unattractive pension fund solutions, especially to smaller companies.
Broad opposition
The argument that the BVG should finally be reformed after 20 years is wrong, as there is no reform backlog in the pension funds, unlike in the AHV. Incidentally, structural improvements for women, such as the introduction of child-raising and care credits, are completely absent from the current reform. Gabriela Medici, the SGB's pensions specialist, therefore emphasizes: "This reform is also bad for women. Problems are not being solved and many are threatened with lower pensions." Recently, eight trade associations, namely GastroSuisse, the Employers' Association of Western Switzerland, the trade associations of bakers and confectioners, hairdressers, fitness and health centers, petrol station stores, CafetierSuisse and the meat trade association have also joined forces to form an alliance "No to the BVG sham reform". They consider the reform to be a failure and recommend rejecting it at the ballot box.
