Pension reduction compensated for by cushioning measures
The federal pension provider PUBLICA is adjusting the technical interest rate and the conversion rate downwards. Thanks to provisions agreed earlier, pension reductions for ETH employees will largely be avoided.
As of 1 January 2019, PUBLICA is lowering the technical interest rate to 2 percent. This reflects the interest on capital after retirement and depends on the expected return on investment. The lower rate also reduces the conversion rate, which determines the pension amount as a percentage of the retirement capital. It will decrease from 5.65 percent to 5.09 percent for a retirement age of 65.
To prevent lower pensions, PUBLICA and the ETH pension plan have agreed upon measures to cushion the impact. On Wednesday, representatives discussed the federal pension fund’s measures and their consequences for ETH employees at an info event organised by ETH Zurich’s HR department, ETH’s social partners and the ETH Staff Commission. As Dieter Stohler, Director of PUBLICA, explained, retirement assets for over-60s will be supplemented. Losses will be completely compensated for 65-year-olds and mostly compensated for anyone younger, so there will be no incentive to retire early. The Board of Directors will make a final decision on 15 December 2017.
Comprehensive cushioning
Mario Snozzi, President of the Parity Commission of the ETH Domain pension plan, explained the additional cushioning measures for those insured at ETH. Thanks to the relative autonomy of the ETH pension fund and some forward-looking decisions, the resources are available to increase retirement assets for 45- to 65-year-olds between 2.6 and 12 percent. The lower risk premium for death and disability will also be added to the savings premium, and savings contributions for 45- to 70-year-olds will likely increase by 2 percentage points. These measures will help the pension level for all those insured at ETH to remain at at least 96 percent of previous levels. The ETH Board will make a definitive decision on the savings contributions on 13/14 December 2017.
Lukas Vonesch, Head of Human Resources at ETH Zurich, drew attention to the courses on pensions offered by ETH and PUBLICA, adding that HR also offers individual advice. He also explained that employees who are over 60 in the second quarter of 2018 will receive a letter with a pension comparison. Other insured people will be informed in 2019, when the new technical interest rate and the new conversion rate come into effect.
Further information from the ETH HR department can be found at www.ethz.ch/employment as well at www.ethz.ch/downloads.
Pictures from the Publica information event
