SWITZERLAND - The conversion coefficient for Swiss occupational pensions will be lowered to 6.4% by January 2011, the Swiss federal council has confirmed.
Earlier this year, the council appointed the home affairs federal department to carry out calculations necessary for the lowering of the conversion rate from 6.8%.
The rate it to be reduced at a more accelerated pace than had been outlined in the first revision of the Swiss federal law on occupational old-age (LPP). This is being done due to long term returns on the financial markets having taken a turn for the worse.
The federal council approved the 0.2% reduction that will take place in four stages between January 2008 and 2011.
The final report on the different stages of reduction will be presented to parliament in 2009. This will take estimated longevity and tax into consideration.
Changes in legislation outlining the reduction in the conversion coefficient are due to come into effect as of January 2008.
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