Why is there a call for banning commissions only in respect to pension funds and not, for example, regarding household insurance?
Because with these kinds of insurance products, brokers receive fixed commissions from all companies affiliated to the insurance association, whether it’s household, business liability or machinery insurance.
Could this system also be applied to the pension fund industry?
Yes it could. This, for example, would be a job for the ASIP instead of calling for a ban on commissions. I should point out here that the ASIP itself does not speak with one voice when it comes to getting rid of broker commissions. In my view, this is rather an ill-conceived, go-it-alone initiative just on the part of the ASIP leadership.
The passing of the pension system tax legislation (Staf) provides Switzerland’s retirement system with a CHF 2 billion cash injection, however the structural problems remain unsolved. Where do you set the priorities in respect to further reforms of the pension system?
The fundamental problems here are related to demographics and funding. Regarding the passing of the pension system tax legislation, the employers' federation recently concluded that the effectiveness of the cash injection won't last 10 years before the next funding package becomes necessary. If to fund the AHV (Federal Old Age and Survivors’ Insurance) we want to avoid raising value-added tax by 5 or 6%, we need to scale back benefits. No one wants that just as no one wants to raise the retirement age. This is why all efforts at reform have failed in recent years.
The second pillar, too, needs reform. Where do the major challenges lie for the BVG?
With the conversion rate and the retirement age. We need to create incentives so that everybody that's willing and able, can work longer. And we also have to ease investment restrictions to ensure reasonable returns can be achieved again. If, in the longer term, we want to maintain a conversion rate of 5%, then investments have to generate healthier returns.
Should retirees also have to contribute to recapitalising the old-age provisioning system?
In principle, those drawing a pension have already paid for their benefits and the promise that underlies these benefits. In my personal view, to cut these would be taboo.
Where are you on a pensionable age of 65 for women?
This should be intoduced immediately. In my opinion, retirement age for men and women should be raised to 67. Naturally this would only apply to those who are healthy and also be calibrated according to the individual professions with their differing stress levels. I know countless people who still work full days even at 70. The flexibilisation of the retirement age is a key issue here.
Where do you see the retirement age in 10 years?
Sooner or later, everbody will agree that we can't go on like this. To keep benefits at their current levels, a retirement age of 67 for all is inevitable.
Should the government do more to support the the third pillar in order to ease pressure on the first and second pillars?
The government is already doing this. That said, I can well imagine that one could raise the tax-free allowances in order to make the third pillar more attractive. As a matter of principle, I believe that every individual should make their own provisions for old age, using every vehicle available.
If you could give the pension funds some advice, would it be?
They should devise flexible pension plans, keep costs down and work more closely with the SIBA brokers.
Please note: the statements made here reflect the views of the person interviewed and do not represent the opinion of elipsLife.