The first BVG/LPP revision in 2003 already lowered the conversion rate for retirement pensions until 2014 to 7% for men and 6.95% for women. The conversion rate was lowered because it was expected that returns on retirement savings capital would be lower in the future than they were in 1985 when the compulsory occupational benefits system was introduced. In the second pillar, salaries between CHF 20,520 and CHF 82,080 are subject to compulsory coverage. With rising life expectancy, pension payments continue longer. The return on capital is no longer high enough to cover pension benefits.
Since the minimum AHV/AVS and compulsory BVG/LPP coverage does not provide adequately for retirement, supplemental insurance is essential. The higher a person's pre-retirement income, the higher the replacement rate must be over the 2nd pillar compulsory and 3rd pillar benefits.
The vote on 7 March showed that there is a good deal of uncertainty regarding occupational benefits. In its spring session, Parliament voted a structural reform of occupational benefits with a view to strengthening public confidence in the system. The reform improves the supervision of pension institutions and introduces binding rules regulating the duties of the parties at 2nd pillar-level and the powers and functions of the pension institution's governing body. Significant improvements were also made in corporate governance, and clear legislative guidelines, greater transparency and conflict of interest rules have been established to
protect participants.
Liberty's BVG/LPP collective foundation offers transparency and utility while containing costs. As the success of our BVG/LPP business shows, our clients are grateful!
Clients and intermediaries value our consulting services, competitive risk pricing and attractive fee schedule. Moreover, as an added advantage, the flexible services of our other foundations are at their disposal.