New Swiss pension system: A thought experiment of UBS

Thanks for sharing.

There are some interesting ideas there. I like the idea of higher coverage for low-to-medium earners. Having free choice of second pillar also sounds definitely nice. I find it weird that they are capping contributions for the second pillar at 150k. And there is also some value to a long-term care insurance.

I am surprised they spend so much time on these thought experiments. I guess they would like to get into the second pillar free market.
 
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Baptiste Wicht said:
I find it weird that they are capping contributions for the second pillar at 150k.
Click to expand...
I guess they want to limit the second-pillar tax benefits for high-income earners. See page number 25:

The maximum insured salary should be high enough
to allow 1) high-income years to compensate for
low-income ones, 2) compensate for shorter careers
and career pauses, 3) enable single earners to
provision for their non-working partner. Too high a
cap would unnecessarily burden companies and
households. Moreover, it shouldn’t be the
government’s responsibility to ensure that very high-
income earners can maintain a potentially lavish
lifestyle in retirement. High-income households have
the savings capacity for voluntary savings.


Baptiste Wicht said:
I am surprised they spend so much time on these thought experiments. I guess they would like to get into the second pillar free market.
Click to expand...
Probably, also into the first pillar free market: the first pillar pensions are thought to be paid out by private institutions which get the final accumulated capital from a public collecting institution (page number 12).

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Fair point.

I would not want the first pillar to enter the free market. This could cause many problems. But the second pillar should be more open.
 
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