The pension reform threatens to collapse: who will save the LPP reform?
In two weeks it’s the sausage: how to reform the second pillar to stop the redistribution between active and retired? The solutions are on the table. But they are obviously the bad ones.
This is one of the most important reforms of this legislature. It decides on the amount of future pensions, who should finance them and how. The development of occupational pensions initiated by the Federal Council and the social partners pursues three objectives: to ensure the financing of the future despite longer life expectancy and lower investment returns, to enable part-time employees to plan for everything , and maintain – or even improve – the level of pension for all insured persons.
Politicians struggle with this task. There’s a lot at stake, it’s about existential questions. At the same time, the changes are very technical and therefore complex. This is illustrated by the most important adjustment screw, the minimum conversion rate, which must be reduced from 6.8 to 6%. It determines the part of the accumulated retirement savings that is paid monthly in the form of an annuity.
For compulsory insured persons, the reduction means a loss of pension of 12%. Because there are very different ways of dealing with it, the two social security commissions have devoted a lot of time to this project and have asked for help from the Federal Social Insurance Office (BSV), which has provided 35 different reports.
What is difficult to understand in this context: the reform is in great danger of collapsing. Because the proposal of the pre-consultative commission will almost certainly be sent to the plenary session of the Council of States. The representatives of the SVP oppose it, usually also the FDP and the center party. They think the solution was far too generous. And what makes the situation even more delicate: two weeks before the crucial debate, there is no satisfactory alternative.
How could it have come to this?
The National Council gave the first impetus to more generosity. At the end of 2021, it passed a slim bill with a clear (bourgeois) majority. He wants to allow low-wage and part-time workers to set up their own occupational pension scheme. Young people and women in particular benefit.
In the case of the transition generation, the advice was strict: only people who are compulsorily insured and therefore face a loss of pension will be compensated. According to BSV estimates, one in three people would be entitled to a pension supplement. By way of comparison: The Federal Council had provided in its model for a supplement for all insured persons.
Was the National Council too stingy?
Already at the beginning of the year, the bourgeois social politicians announced that improvements were necessary, that the bill had to be better absorbed socially to pass a referendum.
The second impetus for more generosity comes from the AVS debate. The bill, which will be voted on in September, provides for a gradual increase in the retirement age for women up to the age of 65. Added to this is the promise that women, especially in the second pillar, should have better financial security.
What the commission pulled out of a hat a few weeks ago doesn’t just help women, low-wage and part-time workers. People who last earned CHF 8,365 per month should also benefit from increases of up to CHF 200 per month. Progressive supplements of 50 to 150 francs per month must also be paid for higher salaries. Only those who earn more than 11,950 francs per month receive nothing. According to the BSV, 88% of policyholders would benefit from it.
SVP states councilor Alex Kuprecht worked out a compromise, but he said: “I’ve never understood why we should increase compensation in this way.” His Party colleague, Hannes Germann, speaks of “madness”. If young people had to pay to gild the transition generation, the reform would no longer make sense. “Who else is the reform supposed to serve? he asks rhetorically. The project is considered oversized until the middle. According to the BSV, the financing of pension supplements costs 25.2 billion francs. The proposal of the National Council 9.1 billion.
FDP state councils wreak havoc
According to the research of the “NZZ”, the origin of this difficult situation would be a “misadventure”. FDP States Councilor Josef Dittli presented the proposal – and misjudged it. Apparently, he initially wanted to distribute supplements even more generously, the maximum version was avoided in the commission.
Dittli told “NZZ” that he couldn’t estimate the financial magnitude, that his proposal was “probably” too generous. When FDP members Dittli, Damian Müller and Johanna Gapany suddenly found themselves alone on the red-green side in the commission, they understood what was hitting them.
However, the Dittli proposal is not a viable option for the party. But because the only alternative on the table is the National Council model, there is no middle ground, no compromise, two weeks before the important decision is made. Everyone now waits impatiently for the FDP to emerge from this chaos. The members of the Council assume that they will choose a short-term “savior”, who will propose a way out of the unfortunate situation via an individual candidacy. Because it is clear to both the FDP and the center strategists: an alternative to the National Council variant is needed to save the model at all.