UBS AG will make additional contributions to its pension fund, Pension Fund of UBS, Zurich, starting in 2020 due to negative interest rates and projected diminished investment returns, the Swiss bank said in a fourth-quarter financial update.
On projections of increasing life expectancy, the bank agreed to support its 20 billion Swiss francs ($20.7 billion) occupational pension fund with a contribution of up to 720 million Swiss francs, which it will make in three installments in 2020, 2021 and 2022.
Due to these projections, UBS will also lower the conversion rate, a rate which determines a worker's pension in Switzerland. The minimum conversion rate set by the Swiss government stood at 6.8% in 2017. Specific UBS figures were not provided.
In addition, the regular retirement age and employee contributions will be increased, UBS said. However, the Swiss bank would not specify the size of these increases.
A spokesman could not be reached for comment about the changes by press time.