Redundancies: the end of compulsory early retirement

People who are made redundant at an age close to the age of retirement will no longer be compelled to take early retirement.

After the Conseil National [National Council], the Conseil des Etats [Council of State] has approved the proposal of National Councillor Susanne Leutenegger-Oberholzer to modify the law on occupational mobility (LFLP art. 2 par. 1-II) as well as the circular on professional pension plans (OPP2 art. 1i).

The change is designed to correct a current practice of the Federal Court regarding the 2nd pillar of the Swiss pension system which discriminates against workers of an age close to the age of retirement who are made redundant. Currently, such workers are compelled by the rules of many pension institutions to take early retirement even against their will. Only a minority of pension institutions specify as part of their rules that early access to old age pension or benefits must result from a voluntary decision on the part of the insured.

This situation has negative repercussions on the value of the pension of these employees, and even those who wish to continue working and benefiting from occupational mobility have no freedom of action in this respect.

The revision of the law is designed to put an end to the automatic payment of LPP benefits by introducing a requirement for early retirement to result from a voluntary decision on the part of insureds who are made redundant at an age close to the age of retirement, whatever their pension institution.

The new law should come into force in 2010.