Dhe Swiss people approved a reform of the state pension system with a narrow majority on Sunday. This is intended to secure the financing of the largely pay-as-you-go old-age and survivors’ insurance (AHV) for the next ten years. The reform should come into force in 2024 and stabilize the pension system with more income and less expenditure. For example, the normal retirement age for women will be raised by one year to 65, bringing it into line with that of men. In addition, VAT will be increased by 0.4 percentage points to 8.1 percent in favor of the AHV fund. As a result, an additional CHF 1.5 billion will flow into the system each year.
The adjustment of the retirement age does not take place in one step, but in stages over many years. In addition, women who are already approaching retirement age receive lifelong financial compensation, the amount of which varies depending on the year of birth and income.
pension period increases
In the first decade after the reform came into force, around a third of the savings resulting from the higher retirement age will go to these compensation payments. But without this concession, the advance at the ballot box would have been shipwrecked.
Switzerland is struggling with reforms in the state pension system, which is in danger of losing its balance due to demographic developments. Because AHV expenditure is rising faster than income because the number of pensioners is growing faster than the number of employed people who pay part of their wages into the general pension fund. Since life expectancy is also increasing, and with it the length of time people can draw a pension, the sum of the pensions to be paid out is likely to rise from CHF 48 billion to CHF 63 billion within ten years. Without reforms, the AHV is threatened with a deficit worth billions in a few years.
This has been known for a long time. And yet for more than a quarter of a century all serious attempts to rehabilitate this important social work and secure it financially for the future have failed. Most of the time, the people vetoed it because there were enough citizens who saw themselves disadvantaged at some point by the planned conversion measures.
The result on Sunday was also extremely close. According to projections, the approval rate was only around 51 percent. The unequivocal yes of the men was opposed to a clear no of the women. The “Röstigraben” was also evident: while the majority of German-speaking Swiss agreed, citizens in the French- and Italian-speaking part of Switzerland clearly rejected the proposal in some cases. The negative attitude of the women reflects their own dismay, said pollster Lukas Golder on Swiss television. The campaign by left-wing opponents of reform, which launched the referendum against the bill that had already been passed by the government and parliament, seems to have caught on well.
Unilaterally at the expense of women?
The opponents had argued that the reform would be unilaterally at the expense of women, who already receive a third less pension than men. In addition, opponents claimed that if the law were passed, it would be a done deal to raise the retirement age to 67 for everyone in a few years. However, the latter is not true. Parliament has only instructed the government to “submit a proposal for stabilizing the AHV for the period from 2030 to 2040” by the end of 2026. This reflects the acknowledgment that the reform that has now been launched is not sufficient to put the state pension system on a solid footing in the long term.
The Swiss clearly rejected an initiative to ban factory farming. Around 63 percent of the citizens who took part in the vote voted against the initiative launched by an animal protection association, which aimed at more animal welfare and more space in industrial livestock farming. The initiative also wanted to enshrine the dignity of animals in the constitution. The opponents of the initiative had argued that the number of animals in Switzerland would drop significantly and food prices would rise if it were accepted.
With a no-share of around 51 percent, the Confederates sunk the reform of the withholding tax passed by Parliament. The plan was to abolish the withholding tax on interest on corporate bonds issued in Switzerland.
