. It sounds technical, but for every future pensioner it has a very concrete meaning. So what does it actually do?
The conversion rate is the percentage by which the accumulated retirement balance is converted into an annual pension at retirement. An example makes it tangible: with a retirement balance of 100,000 francs and a statutory minimum conversion rate of 6.8 percent, the result is an annual pension of 6,800 francs, for life. The conversion rate therefore calculates the pension. It is not the interest rate at which the balance is credited during working life, it does not calculate the death benefit, and it does not set the coordination deduction either.
There is a good reason why this one number is so often the subject of political dispute: the higher the conversion rate, the higher the pension, but also the greater the burden on the pension fund, especially given rising life expectancy. The conversion rate is thus the lever on which the level of future pensions very directly depends.