ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Every summer as a teenager, I worked for a family business in my small hometown in upstate New York. I would work the morning shift at the ice cream stand and then walk next door to Danny’s restaurant, owned by the same family, to bus tables at night. I was motivated—I wanted to earn enough money to pay for my living expenses and books during college. But that experience did more for me then help me earn money for college. I also learned an important lesson that has helped me in every job I have ever had since then and has contributed to multiple promotions.One of the owners, Vinny, often repeated a saying to the staff that has stuck with me: “If you can lean, you can clean.” I’ll admit that as a teenager, this off-handed comment sounded a bit like micromanaging at first—what was the harm in taking a little break once in a while?—but I realized that working hard and putting in extra effort had its rewards. I was quickly given more responsibility at the ice cream stand and allowed to open and close the shifts on my own.In my early 20s, I left upstate New York to move to my now-home state of Maryland and took the principle of “If you can lean, you can clean” with me. I realized that becoming indispensable to my bosses had its rewards in the corporate world as well. Being proactive by offering to take on additional work and taking tasks off my manager’s plate built trust, respect and accolades—because, in a nutshell, I put in the effort to make my boss’s job easier. continue reading »
Lucerne, SwitzerlandMeanwhile, a joint study by researchers from Lucerne University’s Institute of Financial Services and the University of Basel’s Faculty of Economic Sciences confirmed the problem of cross-financing in the second pillar.“Today’s focus on secure pensions at a high level and the short-term obligations for interest rates and funding levels connected to it, which no longer match market environments, have to be questioned,” authors Yvonne Seiler Zimmermann and Heinz Zimmermann wrote.They emphasised that Pensionskassen “have to be able to invest in risky assets over the long term” to achieve higher returns.A second paper, by Swiss consultancy C-alm, also highlighted the potential of the second pillar but warned about too much flexibility for members, such as providing a free choice of Pensionskasse for individuals, which has been frequently discussed.The researchers argued that such “measures for liberalisation are breaking with the concept of an intergenerational risk pool”.They said this “would undermine a risk compensation and with it the possibility to take investment risks”.C-alm pointed out that risk taking and risk compensation needed an “appropriate level of collectivity and long-term perspective”.Both studies (in German) can be downloaded from the Asip, the Swiss pensions trade body.See the June edition of IPE for a country report focused on Switzerland. Pension promises made in the past cannot be adjusted under Swiss law, meaning older pensioners’ benefits are calculated using a higher Umwandlungssatz, or conversion rate. This rate determines how much of an individual’s total accrued pension they can receive every year.Newer pensioners receive considerably lower pensions from the second pillar and active members’ assets have to be used to fulfil all these promises.“Overall it can be noted that the systemic risks in the second pillar continue to increase with the changes in the economic, financial and demographic environments,” Pierre Triponez, president of the OAK, noted in his foreword to the supervisor’s annual report.He said there was need for action from the authorities on new legislation, especially after the pension reform package Altersvorsorge 2020 failed to get public approval last year in a national referendum.In its analysis of the financial situation of Swiss Pensionskassen, the OAK also noted that the long-term minimum interest rate granted stood at 2.75% – down from 2.97% in 2016. The technische Zins – the return assumed when calculating contributions – was lower at around 2.25% on average.The OAK expected more Pensionskassen to make adjustments to their parameters.Studies back up regulator’s fear Switzerland’s second-pillar pension funds are being forced to use assets accrued by people still working to pay current retirees’ pensions, according to the country’s pension regulator.“Systemic risks in the second pillar continue to increase with changes in the economic, financial and demographic environments”Pierre Triponez, president, OAKAround CHF7bn (€5.9bn) a year – roughly 1% of the total capital in the Swiss second pillar – must be taken from active members’ assets to pay for current benefits in Swiss Pensionskassen, the Oberaufsichtskommission (OAK) said in its 2017 report.“This annual reallocation has reached critical levels,” the OAK warned.