Further pension reform in Switzerland is needed to ensure long-term sustainability, according to the International Monetary Fund (IMF).

Publishing its report, Switzerland: Staff Concluding Statement of the 2022 Article IV Mission, the IMF acknowledged that pension reforms are advancing but detailed where improvements can be made. It noted key actions under consideration, such as male/female reference age harmonisation, additional first-pillar VAT funding, and cuts in second-pillar annuity-conversion rates.

It stated that lower system entry age, wage thresholds, and insured salary amounts should shore up pension adequacy for lower-income and multi-job workers.

“If approved, the reforms will close funding gaps through 2030. To ensure sustainability thereafter, further reference age increases will be needed, linked to life expectancy, along with actions to extend 65+ employment (lifelong learning, flexibility), and likely, additional second-pillar conversion-rate cuts. Measures to improve pension fund efficiency, governance, and investment performance would also be helpful,” the report noted.

The IMF also stated that the authorities are taking actions to strengthen supervision, resolution planning, financial integrity, FinTech regulation, climate reporting, and sustainable finance.

“These should continue, along with pension reforms that would strengthen coverage and sustainability. Steps are also being taken to advance climate policies, EU relations, and energy security,” the report said.

A concluding statement describes the preliminary findings of IMF staff at the end of an official staff visit (or mission), in most cases to a member country.

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