I read this article and it seems to be the result of continuous issue facing Swiss pension system.
In my view, following could be the reasons
Low/zero inflation as well, right?
Low interest rates yes.
But even if inflation is low, it’s still not deflation. This means real pensions have fallen even more than the headline.
Still people used to have higher pension with some inflation erosion over time. As we transition to a low inflation setup there’s one generation that benefits.
Mine got up a few 100% in the same time. The difference is easily explained: you manage your own money or you let somebody not even chosen by yourself manage your money without taking your risk tolerance into consideration.
If you could manage your own money that would still be a problem; some people prefer to pay those god-chosen money managers of the pension funds and those money managers salaries and the dividends they pay (to me 
) do not drop but rise. And there is no financial education, so most people are not able to do this. But they should at least be able to choose a money manager to do so.
I think you are talking about taxable account but this article is about 2nd pillar and 1st pillar. How can you manage your own money when it comes to pension fund investments?
No, 2nd pillar. Lump-sum and invest against pension.
BTW: 1. pillar did not go down AFAIK.
I see.
As far as I understand. I think the problem is not about what happens after retirement. The problem is what happens in accumulation phase. The interest credit to pension funds is reducing which reduces the final amount at time of retirement.
after retirement people can choose what to do. But I think this article is about 2nd pillar payouts using regulated conversion rate which is quite high to be honest (6.8%)
I don’t think it is too high. A lot of folks make a good living off our pensions for decades without ever paying in anything: the money managers, the pension funds.
But that is not the main problem, the problem is risk. This is not the first pillar where everything had to be payed out at the beginning the same time the money came in. It is a decade long investment with completely different parameters. So the money should be invested differently.
In other words: the laws have to change.
I feel we have quite the range of opinions on what do people consider high vs low, and good vs bad in terms of conversion rates on this forum, as seen over several conversations on the topic that managed to stay open.
Whether it is too high or not, may be a matter of opinion on needs.
However, the more important question is whether it is sustainable or not. I think various exercises have shown that it is not sustainable.
Therefore, it should be immediately reduced to the sustainable level, otherwise the situation will get worse and will also reduce solidarity as unsustainable payments will effectively rob the future retirees to pay the current ones.
Life expectancy after 65 has increased by ~3y since 2003 though, so in practice total payments are flat/sightly increasing as far as I can tell.
It is not sustainable because the investment strategy is mostly wrong. You have to account for decades of investing, not year-to-year.
BTW: the cited article is based on VZ data. NZZ justifies: the rent did go down “only” 16% because of the first pillar, in the second pillar it was 40%.
https://archive.md/CQ1yS
Lump sum payments are not included in those numbers. In other words: I am not included in those numbers. Of course I would help to even out the numbers… 
I actually mean that even with conversion rate of 6.8%, the pension payout is 40% lower vs 2002
What this means is that lumpsum available at the time of retirement is also much lower versus what it used to be
I think you are talking about completely different thing. We need to read this article as following.
I read it that Y1 is also significantly less than Y. It’s not only about X1 vs X. So what you do with lumpsum Y1 is up to you. You can withdraw as lumpsum or take annual pension X1. But you have less lumpsum to begin with.
I understand you are good in investing but this is not what this article is about.
I am fully aware what you mean, but I treat it as a fact of life and fully expected. The realisation 4-5 years ago was part of what drove me to start saving & investing.
No, it doesn’t work like that. Most people are beyond terrible with money and they need a safety net not to become destitute and humiliated in their old age, it’s a sign of an advanced society. The goal is not to make money, it’s to ensure that some money can be given sustainably, an amount which is bound to decrease over time in the west.
Even though I understand it’s part of life. But I think there is a fundamental problem somewhere.
let’s say you have same lifetime income and you retire in 2002 vs 2025, why your pension should be 40% less from 2nd pillar. This is the key question
Actually I should be way worse at investment than the highly paid professionals at the pension funds. But their investment style is limited by law and that may be the real problem here. And of course the lack of choice.
The investment span is 60 years counting the retirement. In 60 years of investment horizon one should be able to get better returns.
It’s kinda obvious innit? Some people are born prettier, smarter, richer, with better genes, in better homes/richer countries, or in a better time for pensions, tough luck 
During my parents’ 30s-40s there were jobs aplenty, you could get a property for a song, everything was dirt cheap, pensionable age was ~5 years lower than today, the ol’boomer generation (the actual boomers, not what 20-somethings on reddit think when they meet someone who can string 3 words in the right order).
maybe if they just did a 80/20 world passive tracker/CH bonds for the last 50 years, everything would be fine