Less investment income: The return on invested retirement assets is lower, due to lower interest rates.
Increasing life expectancy: Happily, we are enjoying our retirement for longer and longer. However, this means that retirement assets at retirement have to last longer.
Rigid conversion rate: Current conversion rates are based on outdated data on life expectancy and on overly optimistic interest rate promises.
Unfamiliarity with investment strategy: The majority of Swiss employers and employees are unfamiliar with the investment strategy of their retirement provision. Eventhough, for many, savings in the 2nd pillar represent the largest savings component.
Financing commitments: Investment returns can no longer finance the promises of the conversion rate. A funding gap exists for retired persons.
Unfair redistribution: The funding gap is closed using part of the returns generated on invested retirement assets.