Swiss pension outcomes are falling – could “matching” be part of the answer?

Low, even negative, interest rates and uncertain growth prospects is becoming a “new normal” in Switzerland. The impact on pension fund finances is well documented – pressure on funding levels, tough to find the right investment opportunities and focus on cost transparency. This environment also poses challenges for insured members, and as a result their employers. Expected retirement outcomes have fallen. What does this mean for employees and employers? 

10 years ago an insured person would expect higher returns on any money they invest for retirement than they would today. The mandatory interest credit for Swiss pension plans according to BVG/LPP was 2.50% in 2007 compared to 1.00% today.  Ten-year Swiss government bonds yields have fallen from 2.6% to -0.1% in the same period. This not only affects expected returns on the assets set aside but also the cost of providing an income for life after retirement. Life expectancies for retiring pensioners have increased by about 1 year for females and 2 years for males in that time which also needs to be funded.

All of these factors have had a major impact on retirement outcomes. Based on our calculations, in 2007 a 40 year-old could invest CHF 7’100 and expect a pension of a CHF 1’000 a year for that investment. Today a 40 year-old would expect to have to invest CHF 14’700 – more than doubling of the cost of retirement over 10 years. In that time, inflation expectations have also fallen, but overall the cost of retirement has increased.

What can pension funds do?

Pension funds aim according to our experience to maintain the level of retirement benefits they provide while financing the promises already made. But pension funds are in a “zero-sum” game – without extra funding, members will ultimately receive lower benefits on average when results are not what was expected. Robust analysis and forecasting of what employees can expect to receive, combined with clear communication may be the best what they can do. Other measures are down to employees and employers as recipients and sponsors of retirement benefits.

What does this mean for individuals and employers?

Find higher returns? In conventional collective Swiss plans, employees share in the overall returns of the fund as they are credited to them. This limits opportunities to take more risks, with an expectation of higher returns. For higher earnings, it is possible to have individual strategies through a “1e” pension plan. These plans can be used to seek higher returns, but this may not be suitable for all.

Later retirements? Without saving more, employees have to retire later for the same outcome.  In some ways this is only reasonable: If life expectancies increase without changing retirement ages, the proportion of life we spend in retirement rises. Employers may have to prepare for the ageing effect on their business – not only their workforce recruitment and retention, but possibly their business strategy and target markets.

Employers pay more? One answer may be employers paying more. But employers face economic challenges themselves, with increasing competition and pressure for results. For most companies, raising costs or investing cash may not be palatable.

Employees pay more? Creating more awareness of the individual options available for the employees is one option. Additional voluntary employee contributions are typically deductible for tax purposes. Some employees don’t have confidence in their pension plan and are not keen to lock away money until retirement.

How can companies create further incentives for employees to pay more? A look abroad could help.

Could “matching” be part of the solution?

In the US as well as the UK, contribution “matching” is widely used in pension plan design. Employer contributions are adjusted to “match” those of employees. When an employee contributes a percentage of their salary into the plan, the employer contributes an amount directly linked to what the employee pays. This could be 1:1 – i.e. if the employee pays 2% of pay, employer pays the same. Or some ratio like 2:1 or 1:2.

The big advantages of matching are two-fold: it encourages employees to pay more; and it focuses employer spending where it is most valued by its employees. One of our clients challenged the common Swiss plan option of employers paying the same for all employees, whereas employees can choose their level: “Why can employees choose to pay less, but I cannot follow when they do?” A reasonable question that matching helps to address.

The challenge is that legislation in Switzerland currently restricts the ability to apply matching within the regular plan. The law requires the employer contribution rate to a pension plan to be the same for all employees in the same situation (e.g. age, grade etc). “Matching” can be done through the buy-in system. So with the right plan design, matching can be incorporated within the Swiss plan.

This won’t for every situation as the use of buy-ins is subject to certain caps and restrictions which may become a barrier. Plan administration may be more complex. But in challenging times for pension outcomes, new solutions may be needed.


Richard Köppel
Pensionskassen-Experte SKPE, People and Organisation
Tel. +41 58 792 11 72
Adrian Jones
Director, People and Organisation
Tel. +41 58 792 40 13

Management of cyber risks for hospitals


The European Union Agency for Network and Information Security (ENISA) is a network of security expertise. It provides assistance to member states of the Union European both in the private and public sectors to increase infrastructure security resilience and compliance with EU legislation.

ENISA has just released a study about the shift for hospitals from the “traditional hospital” model towards a “smart hospital” one. A hospital becomes “smart” when more and more Internet of things (IoT) devices are used and connected to the network in the hospital.

While this new way of working offers undeniable benefits, it also brings new security challenges. As such dependency on IT is increasing ant the risks need to be managed appropriately as do cybersecurity and resilience considerations.

Goal and methodology

The study aims at reviewing the threats and vulnerabilities associated with smart hospitals and upcoming digitalisation. It takes a separate look at the technical and organisational measures that must be set up to reduce these risks to an acceptable level.

To get a global understanding, the process involved the participation of more than 30 security professionals in senior positions from either the hospitals, the health industry, or policy-making agencies. The study summarizes nine main gaps that need to be addressed by hospitals in order to be ready to adapt to IoT devices and move forward in the digital transformation.


 The following conclusions were reached by ENISA:

  1.  The top two threats perceived by respondents are caused by human errors (first) and malicious activities (second). These threats can also cause maximum damage to hospitals (77% for malicious actions and 70% for human errors)
  2. Respondents clearly identified infrastructure as the most critical asset for small hospitals (please refer to chart 1)
  3. Respondents considered that among deployed measures, only few are actually effective and most of these are technical (please refer to chart 2).

hospital study

hospital study2

Conclusion of the ENISA study

Hospitals are not ready for the digital future and smart devices because

  • IT assets are not managed in a central inventory – the study offers a categorisation schema to do so
  • Threats and risks are not assessed and consequently managed – the study offers a taxonomy of threats applicable to smart hospitals
  • Identification of good practice and the gaps in good practice in a hospital are not identified and closed in a timely manner – the study identified nine major gaps which are seen in most hospitals

How PwC can help

The question is no longer whether a hospital can be the target of a cyberattack but when.

Based on our experience, both as auditors and cybersecurity consultants, we have developed an approach which helps to enhance the security stance of hospitals. Our approach comprises the assessment of three aspects: people, processes and technology.

An appropriate level of cybersecurity, compliance and privacy requires a structured approach balancing governance, processes and technology. It includes:

  1. A strategy for how to address cyberthreats, manage risks and establish governance
  2. Identifying the IT assets, the risks and responsible roles in and for the organisation
  3. Protecting IT assets and data appropriately
  4. Detecting cyberattacks, data exfiltration and human errors early and efficiently
  5. Responding effectively to IT security incidents and
  6. Recovering according to defined time objectives to minimize business impact

By the end of the assessment, you will be aware of any gaps with respect to regulatory requirements and of how your security programme lies compared to industry good practices.

strategy hospital

bild health

If you have any questions or remarks, please do not hesitate to contact me.

Pharma & Life Science Hot Topics

Has a health authority prohibited the sale of your pharmaceutical products in Europe, because you are a Swiss established company?

Sale of pharmaceutical products within the EU by non established companies – background

  • Recent developments show that health authorities increase audits and prevent the sale of pharmaceutical products within the EU by companies located outside of the EU, if they do not have a correct wholesaler license in place.
  • Legal basis: The pharmaceutical legislation, Art. 76 of the directive 2001/83EG, the anti-counterfeiting directive 2011/62 and correspondent legal acts implemented in 2015 in different EU member states
  • Consequences/major challenges:
    • Restructuring the current Swiss business model
    • Significant changes in the supply chain
    • Direct and indirect tax implications in Switzerland and in the European Union
    • ERP system and contract adaptions
    • Etc.

Pharma & Life Science Hot Topics: Sale of pharmaceutical products within the EU by non established companies

Key questions
Is your pharmaceutical company established in Switzerland?, Do you sell pharmaceutical (end-) products/drugs in the EU?, Is the wholesaler license used issued on the name of another company than that one that sells the products in the EU?

PwC’s solution
If the answer of all three key questions is yes, we recommend to have your business reviewed and optimized. We have developed a pragmatic solution that works in practice from a regulatory, direct and indirect tax as well as legal perspective –in line with local Swiss and European regulations.

Call for action / Your benefits
We would be pleased to discuss further with you and offer a solution that is perfectly customized to your requirements and needs, in order to ensure a smooth, cost efficient and compliant sale of pharmaceutical products in the EU.

PwC Pharma & Life Science Tax Hot Topics

Download here the publication in PDF version: Pharma & Life Science Tax Hot topics



Sandra RagazSandra Ragaz
Director, TLS
+41 58 792 44 69

Customs and International Trade

As you may have noticed, some changes will become applicable to the Harmonised System (HS) and subsequently to the Swiss Nomenclature (customs tariff) as well as to the EU Combined Nomenclature (CN) as of 1 January 2017. This includes the classification of pharmaceutical products of chapter 30:

Swiss Nomenclature

Swiss Nomenclature

EU Combined Nomenclature (CN)

EU Combined Nomenclature

Although the import of these products in Switzerland and the EU is still duty free, we recommend to check the classification of your products and makes changes/ amendments where needed. Should you need our assistance with (re)classifying your products, we are of course happy to help you.

PwC Customs & International Trade 2016


Download here the publication in PDF version: Customs and International Trade 2016




Sandra RagazSandra Ragaz
Director, TLS
+41 58 792 44 69

ChrisChristina Haas Brunitina Haas Bruni
Senior Manager, TLS
+41 58 792 51 24

The CIS of the future

Mobile services such as apps for smartphones and increasing integration between systems are fundamentally transforming the healthcare market. Half of all patients already believe that Mobile Health, or mHealth for short, will improve the healthcare system. Physicians, health insurance providers and the pharmaceutical industry also see huge potential in the corresponding healthcare services, but expect that the innovations will take time to be implemented due to security considerations and reservations about data protection. Mobile health services are more than just technical gimmicks: they enable us to prevent future shortages in supply resulting from demographic change. In 2025, 30% of Europeans will be 65 years old or over. The number of chronically ill people is expected to double in the next 20 years. The healthcare market needs to rise to meet these challenges.

Download the full report here.

The Digital Healthcare Leap

New digital health models could help emerging markets leapfrog established markets

Healthcare providers need to embrace digital or risk being left behind

Analysis by PwC on digital health in the emerging markets finds that while traditional digital health models are often too expensive to implement, new more affordable digital healthcare models are disrupting emerging markets which have the potential to give these healthcare systems improved accessibility, safety and quality care.

The digital healthcare Dilemma

Expenditure on healthcare is increasing exponentially in emerging markets (see figure 1). As incomes are rising and the middle class is growing, people are spending more on healthcare and demanding better services. Consumers are no longer passive patients, but have become engaged, with access to new tools and better information. As lifestyles are changing and people are living longer, the emerging markets are witnessing a shift from communicable to chronic disease such as diabetes, cardiovascular diseases and cancer.


This is causing increasing strain on health systems in the emerging markets, which already face the challenge of underdeveloped infrastructure and an acute shortage of resources.

The shift from traditional to new digital health Solutions

Traditional digital health solutions such as Electronic Health Records (EHR) – which are popular in the developed markets – require a huge up-front cost to purchase, install and maintain. Adoption in the emerging markets has therefore been low.

But new, non-traditional solutions such as cloud-based or open-source EHR can help emerging markets digitise at a fraction of the cost. For best outcomes, other healthcare innovations such as telemedicine, mHealth applications and e-prescriptions will be built around the EHR.

Says David McKeering, Partner, PwC South East Asia Consulting:

“Digital health can dramatically improve an organisation’s productivity and, in turn, provide benefits in both patient outcomes and the bottom line. If the costs can be made affordable, digital health could be an answer to the emerging markets’ challenge to achieve sustainable growth and leapfrog the developed nations to provide quality, affordable, universal and patient-centric care. The good news is that new affordable solutions are coming to the market. And with internet and smartphone penetration growing, the existing technology infrastructure could be used to develop innovative solutions to deliver healthcare services.”

Some examples can already be seen in several emerging markets. The Philippines has implemented an open source electronic medical record system for government health facilities called CHITS. And there is strong support for healthcare cloud systems from both public and private hospitals in Malaysia and the Philippines.

Says David Wijeratne, PwC Growth Markets Centre Leader:

“The benefits of digital healthcare can be felt beyond patients. By assisting the prevention of illness and supporting the provision of care through alternative locations such as clinics, fewer new doctors and nurses will need to be trained and fewer additional beds and hospitals created, which can help to reduce the overall financial healthcare burden on governments in emerging markets, enabling them to fund other key areas of the economy. A whole nation benefits from digital healthcare.”

The challenge for healthcare Providers

‘Digital healthcare’ is not about the technologies, it’s about new ways of solving healthcare problems, creating unique experiences for patients and accelerating healthcare providers’ growth.

One thing is clear: digital is here to stay – and if healthcare providers are not prepared, they may be left behind. Says David McKeering, Partner, PwC South East Asia Consulting:

“Hospitals and healthcare providers that fail to adapt will risk declining revenues as consumers turn elsewhere to have their health needs met. They should look at how they will integrate and connect their existing systems with new digital technologies and merge the data locked inside them to generate meaningful, actionable insights for caregivers. In the new digital health era, digitally-enabled care is no longer going to be a nice-to-have, but rather a fundamental business imperative.”

Developed countries can learn from advancements in digital healthcare in emerging countries. Says Rodolfo Gerber, Partner, PwC Switzerland:

“Trends and experiences in digital healthcare in the emerging countries might give interesting hints and learning points for the healthcare system in developed countries. They can benefit from these learning points, as how to implement robust digital solutions for building an integrated healthcare information chain for all  parties involved.”

To succeed, healthcare providers and administrators need to set strategies that harness technology for mutual interests and mutual gain as they build care delivery models with patients – not patient encounters – at their centre.

The companies that will emerge as winners in this new marketplace will be those that can articulate how technology can add value, align incentives, strategically share and analyse data, and redeploy, extend and expand their workforce to embrace digital enablers.

A copy of the report ‘The Digital Healthcare Leap’ can be downloaded here.

VAT exemption to insurance related services about to change

Recent judgement from the Court of Justice of the European Union is likely to lead to greater focus on insurance related services that have previously been treated as VAT exempt.



The Court of Justice of the European Union confirmed in its recent judgement (Aspiro, C-40/15) that insurance claims handling services should be taxable for VAT purposes. This decision is in line with the current practice and/or rules in a number of member states (e.g. Germany, France), however, it is likely to lead to greater focus on the VAT treatment of insurance related services in countries which, to date, have widely granted VAT exemption to insurance related services (e.g. the UK).

Action recommended

We anticipate that the above decision will trigger a review of the scope of national VAT exemption for insurance related services, especially in countries which apply VAT exemption more broadly. Insurers and their suppliers should carefully review their service arrangements and assess the impact of the potential changes – such as potential for higher VAT costs for insurers as well as opportunities to maximise input VAT recovery for suppliers. It may be possible to consider claims handling services as VAT exempt if they are provided as part of single supply together with insurance intermediation (Aspiro did not deal with this matter explicitly).

The Aspiro case

Aspiro provided claim handling services (i.e. receiving and processing of claims and losses covered by insurance, contacting the insured person to conduct inspections to determine the causes and circumstances of an accident, preparing expert loss reports, dealing with appeals and complaints regarding claim handling and administrative and technical tasks related to these activities). Aspiro had a legal relationship with the insurer who engaged them to provide services in the name and on behalf of the insurer, i.e. Aspiro did not have any contractual relationship with the insured persons, however dealt directly with them. Aspiro considered its activities to be VAT exempt insurance services on the grounds that they are a key element of the business for the insurance company.

VAT exemption – what’s in / what’s out

Using the Aspiro example – the court considered two routes to VAT exemption; 1) services which are part of an insurance service, and 2) insurance related services typically performed by insurance agents and/or brokers. It concluded that the services provided by Aspiro did not represent either of the services leading to VAT exemption as Aspiro did not have a contractual relationship with the insured person (key condition for characterisation as an insurance service) nor undertook the role of finding prospective clients to introduce them to the insured with a view to concluding an insurance contract (key condition for characterisation as an insurance related service).


Please contact one of our authors if you have any questions about this matter:

Immy Pandor
Dieter Wirth
Marcella Dzienisik
Tobias Meier


Risk Mitigation Obligations

The material impact for Swiss domiciled entities (banks, insurance companies, fund management companies, commodities traders, pharmaceutical and/or industrial companies) of the ESMA Final Draft OTC Derivatives Risk MitigationTechnical Standards on the risk mitigation measures that have to be implemented under EMIR and the Swiss Financial Market Infrastructure Act (FinfraG/FMIA).

The European regulators (ESMA, EBA and EIOPA) have issued the final draft of regulatory standards on risk-mitigation techniques related to OTC derivatives trading. These provisions apply to most Swiss-domiciled entities trading in OTC derivatives with an EU-domiciled entity, and will (indirectly) also affect the implementation of the risk mitigation measures under FinfraG at Swiss-domiciled entities falling within the scope of application of FinfraG/FMIA. The new standards will enter into force in the next couple of months, although they must technically still be approved by the European Commission. This publication gives a short overview of the main areas addressed by the new provisions.

Please contact with any question about the publication Günther Dobrauz or your previous contact at PwC.



Seizing the future

19th Annual Global CEO Survey/February 2016

In this year’s survey, global business leaders voice fresh concerns about economic and business growth. At the same time, they see a more divergent and multi-polar world where technology is transforming the expectations of customers and other stakeholders. In ‘Redefining business success in a changing world’, we explore how CEOs are addressing these challenges. We surveyed 1,409 CEOs in 83 countries and a range of industries in the last quarter of 2015, and conducted face-to-face interviews with 33 CEOs.

Key findings in the insurance sector

Capture101 insurance CEOs in 43 countries participated in PwC’s 19th Annual Global CEO Survey Like many industries, insurance is grappling with rapid technological change, shifts in customer behaviour, and growing competition from new market entrants. However, change offers huge opportunities. Other industries will be looking to insurers to help manage increasingly complex and uncertain business and geopolitical risks. To capitalise on these opportunities, insurers need to embrace new ways of working, novel ways of interacting with customers, and alternatives to traditional products and services.




If you are interested in reading more, please access our full report on the insurance sector “Creating a platform for competitive regeneration” here.


To see all results of the 19th Annual Global Survey, please visit



Public Procurement in the Health Industry

When it comes to levels of transparency in the field of public procurement, Switzerland is proud about its positioning in international rankings. This has its reasons inter alia in the well-established processes foreseen by law in most of the relevant areas. But also this field of the law needs to keep up with constant developments and innovations in the economic world, including the increasingly broad areas in which public and private activities converge for the sake of optimizing the business environment. Precisely this is what the various legislative levels in Switzerland are envisaging for the future, and substantial changes in this field are ahead of us.

One of the developments will certainly affect the procurement processes to be observed by hospitals, both stately held and private hospitals and health institutions. Philipp do Canto, our expert lawyer in Public Law, describes in this essay a recent court case in the Canton of Zurich that reflects the developments in the field of public procurement in the health industry and deals in particular with the blurred line that distinguishes the obligations of transparency in their respective procurement practices. This is an interesting essay that might be able to give you a flavor about how things are today and into which direction they might evolve in the future.

If this is a matter of your interest, do reach out to Philipp do Canto. He will be glad to elaborate on this topic and share with you his expertise and founded predictions.

Read more here.