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The conversion rate, which determines the pension amount, is not linked to demographic trends but is enshrined in law. Due to the increasing life expectancy, the individually saved capital must be sufficient for more months and years. Therefore, in mathematical terms, the payout would have to be extended and the monthly pension reduced by the lower conversion rate.

A lower conversion rate should also reduce the redistribution between those in employment on the one hand and recipients on the other. The gaps that arise due to the longer period of pension entitlement are closed by the active insured through lower interest rates or higher risk premiums. In the case of pension funds that have insured many employees with low wages in the mandatory sector, pensions have been cross-financed by employees. This stock transfer is for the second pillar, unlike in the first pillar.

The current conversion rate requires an interest guarantee of 4.8 percent. Generating this return securely on the capital market, is often not possible. In order to close the gaps, the pension funds have already significantly reduced the conversion rate for extra-mandatory assets in recent years.

The current coordination deduction and threshold mean that people in low-paid sectors in part-time employment – including many mothers – often have no second pillar. In many cases, they are excluded from occupational benefits insurance. This causes problems in old age, as the OASI alone is rarely enough to cover living expenses and supplementary benefits become necessary.

The current statutory staggering of retirement credit rates means that the employment of older employees aged 55 and over is becoming much more expensive. This can lead to disadvantages on the labor market.

The Swiss Federation of Trade Unions, which coordinated the “Referendum against pension cuts”, criticized the abolition of a permanent solidarity-based levy in the second pillar by Parliament. This levy to finance the pension supplements of the transitional generation was provided for in the draft that the social partners had negotiated. As a result, high incomes and employers should also cofinance the compensation.

From the point of view of the referendum initiative, the BVG reform continues a negative trend that has been observed for years. This means that pensions paid are falling while wage contributions are rising. The initiative expects the reform to reduce pensions by up to CHF 3,240 or 15 percent per year.

One argument put forward by supporters of the referendum focuses on the consequences of the reform for women. Contrary to expectations, the BVG revision will not improve pension payments to women but will worsen them for many. Middle-aged and middle-income women in the transition generation are particularly affected.

The planned supplements to the transitional generation are not dependent on whether a person is affected by the reform or not, but on the amount of pension fund assets saved and the year of retirement. This means that the reform will cost the younger generations more than if only those people who would also have suffered a pension reduction were compensated. The costs are to be financed by employees, companies and pension funds. The supplements are therefore a cross-financing of pensioners by working people that is alien to the system.