For employees between the ages of 20 and 65, solidarity in pension provision is important, and is particularly pronounced in the AHV. But it is also strong in the 2nd pillar. These are the findings of a study by Lucerne University of Applied Sciences and Arts.
The Lucerne University of Applied Sciences and Arts (HSLU) has once again sounded out the Swiss population on the subject of retirement planning. This year’s "VorsorgeDIALOG" focused on the topic of solidarity. This was also against the backdrop of the vote on the 13th AHV pension, which was approved by the people and cantons on March 3, 2024, and the upcoming vote on the BVG reform.
In the study, solidarity is understood to mean redistribution effects both from higher earners to people with lower incomes and from young to old. Overall, the study results show that solidarity in old-age provision is important for many insured persons, but differences can also be identified between the 1st and 2nd pillars. Many respondents are also unable to assess the existing extent of redistribution.
Huge solidarity in the AHV
Solidarity in the 1st pillar is strong: an overwhelming majority want to avoid poverty in old age and finance this through solidarity. Only just 1% of respondents do not want to provide any funding at all. "This high level of solidarity reflects the role of the AHV as a redistribution vehicle for people with lower incomes," says Yvonne Seiler Zimmermann, head of the study. More than half of those surveyed also believe that pensioners should not be burdened by pension cuts in the event of a potential restructuring of the first pillar. 70% of respondents also agree that families should not have to bear the sole burden of redistribution. "Avoiding poverty in old age is clearly perceived as society’s responsibility," says the HSLU economist.
Financing via value-added tax receives lower approval
Over a third (36%) of respondents are in favor of even greater redistribution in the AHV. "This is remarkable," says Seiler Zimmermann, "because the 13th AHV pension, which was adopted this year, has already significantly increased redistribution." The study also shows that more people want to achieve redistribution through higher salary contributions (26%) instead of financing through VAT (21%) or contributions from the federal government and cantons (17%). However, at 31%, many people are also of the opinion that the level of redistribution in the AHV is just right.
It is also clear that many respondents do not have a clear opinion on the extent of the current redistribution: the "don’t know" percentage is between 25% and 39%, depending on the type of benefit. "This could indicate that many insured persons are not even aware of the extent of the redistribution," says the pension expert.
Pillar 2: Surprising popularity
Solidarity in the 2nd pillar is not equally pronounced in all socio-economic groups: 42% of respondents consider redistribution in the 2nd pillar to be justified. A small majority are against it. "Our statistical models show that those people who are in favor of such redistribution are more likely to be financially worse off," says the head of the study. In other words, solidarity between people with higher incomes and those with lower incomes is less pronounced in the 2nd pillar. Even if solidarity in the 2nd pillar is significantly lower than in the 1st pillar, the extent is still surprising for the HSLU economist: "Unlike the AHV, the 2nd pillar is funded. This means that it is not suitable for achieving social policy objectives. Although there are more voices against redistribution in the 2nd pillar than in favor of it, solidarity can still be classified as high," says Seiler Zimmermann. Redistribution is particularly supported when low incomes are not due to a voluntary reduction in the level of employment, but to lower hourly wages.
Just over half (54%) are against pensioners - regardless of their income - participating in pension fund restructuring in the form of pension cuts. On the other hand, there is more support for participation above a certain minimum income: Only 28 percent of respondents are against it. A socio-demographic divide is also evident here: Older people, people with low assets and people with a financial education are more likely to be against pensioners participating in restructuring.
Pension awareness remains low
In addition to the focus topic of solidarity, this year’s study once again examined the financial and pension awareness of people insured under the 2nd pillar. "Unfortunately, pension awareness has not improved, even though there was a lot of debate about it last year and this year in the context of major votes," says the head of the study.
As in the previous year, the level of pension knowledge is modest despite high interest. "It is once again remarkable that the knowledge gaps are particularly high in the area of personal pension provision," says Seiler Zimmermann. More than half of all respondents mistakenly believe that everyone can pay into pillar 3a - even without earned income. Almost half also believe that it is possible to pay into Pillar 2 in any case, even if there are various restrictions.
The problem is not primarily that people say they don’t know something. "These people are aware that they don’t know something and can inform themselves accordingly if necessary," says Seiler Zimmermann. "However, if a person is not aware that their knowledge is incomplete or incorrect, they will not inform themselves. The consequences are inevitably that wrong decisions are made," warns the pension expert.
PensionDIALOG 2024
Every year, the Institute of Financial Services Zug at Lucerne University of Applied Sciences and Arts examines the current level of knowledge of the Swiss population with regard to finance and retirement provision. The analyses are based on a representative survey of 1,245 employed people aged between 20 and 65 throughout Switzerland.
