Swiss Life is making further adjustments to its conversion rates for future retirement pensions in full insurance from 1 January 2022. In concrete terms this means that conversion rates will fall gradually, as in recent years.
The low interest rate environment and increasing life expectancy, which consistently lead to cross-financing from active insured members to new pensioners, pose major challenges for occupational provisions. To take account of this situation and maintain the financial equilibrium of the 2nd pillar, conversion rates are having to be lowered.
The adjustment of the conversion rates will not affect the amount of your accumulated retirement savings at the time of retirement. You can draw your retirement savings as a lump-sum or an annuity, or as a combination of lump-sum and annuity. The statutory minimum benefits will be upheld and paid at all times.
Planning your personal future provisions is becoming increasingly important. Swiss Life would be happy to help you prepare for a financially confident and self-determined future.
What is the conversion rate?
The conversion rate determines the pension that will result from the accumulated retirement savings. For this purpose, the retirement savings accumulated at the time of retirement are multiplied by the conversion rate, which results in the annual lifelong retirement pension.
For example, if the retirement savings total CHF 300 000 and the conversion rate is 6.8%, this results in a retirement pension of CHF 20 400 per annum on retirement at age 65.
With this slight adjustment to the conversion rates – which still remain attractive by market comparison – Swiss Life is reducing the redistribution from active insured persons to new pensioners. Conversion rates are continuing to fall at all pension funds due to rising life expectancy, as retirement pensions have to be paid over increasingly long periods. This demographic reality is being exacerbated by the persistently low interest rate environment. The combination of these two factors means that the annual redistribution from active insured persons to new pensioners is steadily increasing. The need to adjust conversion rates arises from Swiss Life’s responsibility towards all insured persons (active insured persons and pensioners).
The retirement pension benefits shown in your pension certificate will change as a result of the continued lowering of conversion rates.
- A reduction in the conversion rate affects the level of the retirement pension for new pensioners.
- In addition, further benefits in the area of occupational provisions are directly dependent on the amount of the insured retirement pension. These benefits (e.g. retired person's children's benefit, spouse's/unmarried partner's pension on death following retirement or orphan's benefit on death following retirement) may also be adjusted due to the changed retirement pension.
- The lowering of the conversion rate also affects the purchasing potential for financing early retirement. Such purchases may in particular have tax advantages. You should plan your purchases in advance. We would be pleased to assist you with this.
No. Your accumulated retirement savings remain unchanged. The expected retirement savings at the time of retirement depend on the contributions you and your employer pay each month (the so-called retirement credits) and the interest paid on the accumulated retirement capital.
On retirement, your accrued retirement savings will be multiplied by a particular rate. This rate is called the conversion rate, since it converts the retirement savings into a retirement pension. The retirement pension calculated on this basis of this will be paid to you for the rest of your life.
No. You will receive the retirement pension shown in your pension certificate for 2021.
Already drawing a retirement pension?
Nothing will change for you. This adjustment to the conversion rates will not affect existing retirement pensions.
Shaping your retirement in a
With the right preparation, you will have plenty of opportunities to realise your goals and wishes, even in old age. Address the topics of pension provision and retirement in good time. Planning one's personal future provisions is becoming increasingly important. Swiss Life would be happy to help you prepare for a financially confident and self-determined future. The following topics are important here.
1. Early budget planning
Plan your retirement early: it usually comes sooner than you think! Draw up an individual budget to see what income you will need in the future to cover your expenses.
2. Pension fund purchases
Making a pension fund purchase may be worthwhile, especially if you want to secure your financial future over the long term and at the same time benefit from tax advantages.
3. Plan your retirement date well
When should I retire? Would early retirement be an option for me or could I also continue working for longer? If you want to have enough money in old age, you need to plan your pension provision intelligently and select the right age for retirement. The room for manoeuvre is often greater than you think. Nevertheless, many people fail to plan this step in time. Review your personal options directly in our customer portal.
4. Lump-sum payment or monthly annuity
You can draw your retirement savings as a lump-sum or an annuity, or as a combination of lump-sum and annuity. There is no right or wrong decision. However, it is important to take your time making this decision as it will have a major impact on your financial future.
5. Pension optimisation
How can I optimise my provisions situation with the 3rd pillar? With the 3rd pillar you design your own personal provisions. This will allow you to supplement the benefits from the first and second pillars. And you’ll save taxes at the same time.
Make an appointment for a consultation
There are a number of pension options, which can be individually tailored to your needs. The earlier you address the issue of occupational benefits, the greater your financial flexibility for a self-determined life. Our advisors can offer you professional support in all questions concerning employee benefits. We can advise you at the General Agency, at your home or by video – whatever suits you best.