The recent request by ErreDiPi, the Network for the Defense of Pensions, to raise the rate of return on retirement assets to 4% for those affiliated with the Canton Ticino Social Security Institute (Ipct) “is legally and economically unsustainable”. This was stated in a joint statement by the Vpod, Ocst and Sit unions.
An untenable request: the reason(s)? First the general picture. The three unions write: “The IPCT has improved its situation compared to previous years and is successfully continuing its refinancing plan, which should bring the coverage ratio to 85% by 2051, as required by cantonal law. At the end of 2024, the IPCT coverage level will be around 68.1%, slightly lower than the 68.3% initially expected, but with a minimal variation linked to the market performance in the last month of the year. It is important to remember – they add – that this level of coverage is still relatively low, since the Canton has chosen to reorganize the IPCT with extraordinary annual contributions distributed over forty years, rather than in a single solution in 2013. This year, thanks to the good investment results, the IPCT should obtain a return of 5.5%, a positive result, considering that the average annual return since 2013 has been 3.5%, also influenced by negative years, such as 2022, which saw a loss of 9.2%.”
‘The expert would be reported to the federal supervisory authority’
Well, observe Vpod, Ocst and Sit, without ever mentioning ErreDiPi in the press note, “these data make it clear that, unfortunately, it is not economically possible to guarantee a 4% return for individual capital in 2025, as proposed by an online petition”. If the Board of Directors of the Canton Ticino Social Security Institute “were to nevertheless decide to adopt this proposal, the IPCT expert would not approve it and would report inadequate management to the federal supervisory authority, which would lead to the dismissal of the Board and the administration of the IPCT”. At that point the remuneration rate, they warn, “would be reduced to the minimum established by the Federal Law on Occupational Pensions, i.e. 1.25%”.
‘No to political controversy against the director’
That’s not all. Alluding to the question filed last Friday by the MPS, the three unions believe that “for the good of all insured, active and retired people, it is harmful to raise political controversies against the IPCT (which does not grant 4%) and against the its director (who limited himself to making technical assessments on the remuneration of pension benefits)”. Ocst, Sit and Vpod insist instead “on the importance of guaranteeing prudent and responsible management of the cantonal pension fund, which protects the interests of all affiliates (active and retired) in compliance with the laws and the social security system: finally, we underline that a block of the decision on the remuneration of retirement assets for 2025 would be a dangerous act, since it would inevitably lead to the reduction of the remuneration to the legal minimum of 1.25%.
The three unions “will fight together to protect the interests of the members, proposing a remuneration rate higher than the LPP minimum also for 2025, hoping to obtain it as done consecutively in the last three years”. To “achieve” this objective, they call for “a constructive dialogue between employee and employer representatives within the IPCT Board of Directors”, with the aim “of finding a shared solution” by the “half” of this month.
The rift
However, the split within the IPCT Board of Directors is clear between the representatives (five in total) of the active insured: on the one hand ErreDiPi (joined for the first time, in the last renewal of the Council, with three representatives) and on the other Ocst and Vpod (the SIT representative was not re-elected).
