On September 22, 2024, Swiss voters decisively opposed the proposed reform of the occupational pension system (BVG Reform), with 67% casting their votes against it. The reform sought to tackle challenges within Switzerland’s second pillar of pension savings, focusing on ensuring long-term financial sustainability and enhancing coverage for part-time and lower-income workers.
Reduction of the Minimum Conversion Rate: A proposal was made to decrease the conversion rate, which calculates pension payouts from accumulated savings, from 6.8% to 6.0%. This change would have led to reduced pension benefits for retirees.
Lowering the Entry Threshold: The reform sought to lower the threshold for mandatory inclusion in the pension system, potentially allowing around 70,000 additional part-time and low-income workers to participate in the second pillar pension system.
Adjusted Coordination Deduction: Modifications to the coordination deduction aimed to raise the insured salaries of low-income workers, thereby increasing their contributions and enhancing their eventual pension benefits.
Compensation for Transitional Generations: To mitigate the impact of the reduced conversion rate on older workers, a transitional scheme with pension supplements was proposed. These supplements were capped at 200 CHF per month, depending on the individual’s age and accumulated savings.
Equalizing Contribution Rates: The plan proposed adjusting contribution rates to balance the financial burden, slightly increasing contributions for younger employees while reducing them for older workers, easing their job market pressures.
Although these measures were designed to stabilize the pension system, critics contended that the reform unfairly impacted specific groups, particularly by reducing benefits for future retirees. This opposition ultimately resulted in the reform’s rejection.
