The future of retirement provision
Articles

The future of retirement provision

The Swiss retirement provision system will face several challenges in the coming years. Jan Schüpbach explains in the video what new solutions in the area of Pillar 3a savings could work for the majority.

Future of retirement provision

Jan Schüpbach, co-author of the Credit Suisse pension study "Mind the gap: Part time, timeout, pension shortfalls" explains in the video what options there are to expand Pillar 3a to make it capable of working for the majority.

There are a number of challenges facing Swiss retirement provision in the coming years, including rising life expectancy, demographic shifts, and the environment of persistently low interest rates.

Falling pensions, growing pension gaps

Many pension funds are already responding by reducing conversion rates in the extra-mandatory portion of their insurance. In some cases, future pensioners must contend with significantly lower benefits from the 2nd pillar.

The new pension Credit Suisse study "Mind the gap: Part time, timeout, pension shortfalls" highlights the fact that pension gaps arise in particular during career breaks or when working part time. One option to partly compensate for this is private voluntary savings, such as tax-privileged Pillar 3a. It therefore comes as no surprise that there are discussions about expanding the 3rd pillar.

Potential steps to expand Pillar 3a

For example, it is currently being debated whether to increase the 3a maximum contributions. The proposal to allow retrospective contributions to Pillar 3a would have a greater broad effect if the maximum contribution were not paid in in individual years. For example, missed contributions due to time off for parental leave or to study could be made up. But the large numbers of those who pay in nothing or very little, including many young people, would also benefit.