Pension debate
On behalf of PensExpert, researchers at the Institute of Insurance Economics at the University of St Gallen (HSG) investigated the consequences of digitisation for the Swiss pension system.
21. September 2020
Written by
Corinne Galliker
Communications Manager

Study identifies solutions for reforms in the Swiss pension system 

The new study by the Institute of Insurance Economics at the University of St Gallen (I.VW-HSG) shows a surprisingly high acceptance of pension reforms among the Swiss population. The basis of the study, which the pension company PensExpert commissioned on the occasion of its 20th anniversary, is a representative survey of both the broader population and experts in Switzerland. A total of seven reform proposals were put forward. They were derived from an analysis that examined the influence of key megatrends, such as the working environment's digitisation, on the pension systems. 


Inclusion of all working models 

Both non-experts (76.5%) and experts (73.3%) were in favour of including the entire population in the pension system, in particular self-employed and low earners, who are currently at a disadvantage in terms of pension provision. The integration of non-standard forms of employment such as crowdworking, job sharing and even on-call work is also envisaged. Although everyone is currently included in the AHV system, occupational pension schemes are restricted to employees. Self-employed people have to insure themselves voluntarily. In addition, incomes under a certain limit are insured either inadequately or not at all. 

Central digital pension portal 

The proposal to introduce a digital pension portal that combines all pension-related data and gives everyone a transparent overview of the total benefits they are entitled to from all pillars of the pension system enjoyed the highest level of acceptance among both groups. The approval rates were 81.1% among the broad population and 76.5% among experts. Digital portals of this kind already exist in Sweden and Austria, but no such initiatives have yet been launched in Switzerland. 

Active control over pension decisions 

The idea of supplementing the portal with a personal pension account that enables active intervention in pension decisions also enjoyed a high level of acceptance. A function of this kind would make it possible to optimise pension benefits, the choice of investment policy in the various pillars, pension fund purchases and other interventions and adapt them to the individual needs. This suggestion was welcomed by 69.0% of the members of the broader population surveyed and by as many as 75.0% of experts. 

Time value accounts for more flexible organisation of working time 

Both non-experts (68.8%) and experts (75.0%) were in favour of the introduction time value accounts, a concept that is already established in Germany. These are maintained in addition to the pension system and enable their holders to convert certain salary components such as overtime into credit balances and to save them up. The balances can then be used flexibly when the need arises, for example for sabbaticals, childcare or looking after family members. Such accounts also help to make working time and retirement age more flexible. 

Inclusion of all income types, free choice of pension fund 

The idea of deducting pension contributions not just on salaries but also on other sources of income appealed to the members of the broader population (58.0%) but not to the experts surveyed (25.0%). This would relate, for example, to investment income such as interest on assets. A majority of the non-experts surveyed (54.4%) also favoured the free choice of pension fund, which should no longer be tied to the employer. This suggestion takes into account the fact that employees are changing employer with increasing frequency, with time-consuming pension fund transfer for each employer change . Whereas the AHV already maintains insured member accounts that are independent of the employer, this is not yet the case for pillar 2. The experts surveyed were sceptical about this proposal (approval of 29.4%). 

Individual savings account 

The idea of migrating the pension system to individual savings accounts which each individual insured member can use to accumulate pension capital and fund certain insurance contributions was also popular among the majority of non-experts (60.5%) but not among the experts (47.1%). Such a model, which Singapore reformed its healthcare and pension system with back in 1984, is controversial as it would represent the most radical change to the Swiss system. 


“The broader population is generally very open to reform proposals, whereas the feedback from the experts is significantly more cautious,” is how the two authors, Professors Martin Eling and Christoph Jaenicke from I.VW-HSG, summarise the study. An addition to the existing system generated a more positive response from the experts than more radical changes such as free choice of pension fund or a migration to individual savings accounts. One thing not under dispute is that the Swiss pension system must adapt to the changes in the working environment brought about by digitisation. “It is vital that we do not allow the social partnership to be stealthily undermined as a result of digitisation,” stresses Professor Martin Eling.  

Written by
Corinne Galliker
Communications Manager