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Most Swiss think quality of life will decrease

Old person getting financial advice
A senior citizen planning her financial future. The photo is staged. Keystone

Three-quarters of Swiss expect to have to tighten their belts as they get older.

A survey published on Tuesday by insurance company Groupe Mutuel and newspaper Le Temps found that although 63% of those surveyed have confidence in the three pillars of the Swiss social security system, 60% consider their old-age provision to be inadequate.

The three-pillar model has been anchored in the Federal Constitution since 1972. Demographic developments mean there are fewer and fewer people in gainful employment but more and more pensioners. However, reforms to the pension system have failed several times at nationwide votes.

This is also reflected in the survey. Respondents were sceptical about new reform proposals, with 74% rejecting a higher retirement age. Slightly more than half were against lowering the conversion rate for pension plans.

The term conversion rate means the rate at which invested capital is calculated as an annual pension – given the statistics of life expectancy and expected interest earnings on the capital (return on investment in capital markets). If for example a person has saved a capital of CHF100,000, with a conversion rate of 6.8%, that person gets an annual pension of CHF6,800. Changes in the conversion rate only affect future pensions.

Instead, 57% demanded uniform contribution rates for all age groups, 74% wanted to be free to choose their pension fund and 61% demanded more options to be able to use their second-pillar money before retirement.

The survey was conducted by the opinion research institute M.I.S. Trend among 1,272 people throughout Switzerland in June.

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