SWITZERLAND - The largest Swiss trade union Schweizerischen Gewerkschaftsbund has rubbished the Swiss Federal Council's argument for not raising the minimum interest rate guarantee for occupation pensions.
The council announced the rate was to remain unchanged at 2.5%, following negative return on investments over the first half of the year.
The positive turn in the equity markets last year did not justify a rise in the minimum interest rate guarantee, the council said. In addition, it claimed the downturn in the markets in the first half of 2006 effectively cancelled out the positive results of the previous year.
The decision was described as “a gift to the life insurers” by the trade union, Schweizerischen Gewerkschaftsbund.
“The development within the financial markets, the good returns at the end of the last year and the positive prospects would have justified a rise of the minimum interest rate to at least 2.75%,” the union declared.
According to the Schweizerischen Gewerkschaftsbund the council’s reason for not increasing the interest rate did not hold up to scrutiny.
“A correct comparison of the capital returns of the first half of the year to those of the previous year would have resulted in an increase to at least 2.75%,” it concluded.
Almost exactly three years ago, the unions vehemently objected to the lowering of the minimum interest rate guarantee.
Travail Suisse, the Swiss trade unions confederation, had claimed the government was “bowing down to life insurers.” It had said the move would severely threaten the Swiss second pillar pension system.
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