Thomas Jordan: Challenges confronting the pension system - options and limitations of monetary policy

Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the PK-Netz conference, Berne, 31 October 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen

I am delighted to be able to talk to you at this important event. It gives me the opportunity to explain our position in what is a difficult financial market environment for you especially as pension fund managers. The Swiss National Bank (SNB) is responsible for our country's monetary policy and not for its social policies, nor for its pension schemes. At the same time, however, it is important for us as the central bank that the occupational pension system should be able to fulfil its constitutional mandate: together with Pillar 1 - the Old Age and Survivors' Insurance scheme (AHV) - it is required to ensure that insured persons can maintain their previous lifestyle in an appropriate manner after retirement.

Solid funding is crucial for this, as a pension system must be financially sound if the population is to have confidence in it. Such confidence is, in its turn, of fundamental importance in ensuring that the occupational pension system can perform its key economic role. This consists of giving people the certainty that the assets they have saved in their pension scheme during their working lives will actually be available to them in their old age. A good pension system makes it possible for people to reliably plan their future material needs, and fosters security for individuals and stability for society. It is therefore a key precondition for the prosperity and development of a modern economy. A healthy pension system is central to ensuring social cohesion and is one of the cornerstones of Switzerland's success.