Comparing pensions People are living longer. Will it mean more work?


Swiss Parliament has just increased the retirement age for women to 65 years, up from 64. This may be just a first step, since parliament has for several years mentioned the possibility of raising retirement age to 67 years for both sexes. For some, the increase in life expectancy justifies these increases in the retirement age. Others see it as an unacceptable drop in social benefits. International statistics make it possible to view the situation in context.

In 1889, Otto von Bismarck, the first chancellor of the new unified German Empire, set up a revolutionary concept for the era, called the "retreat".

He then established that the optimal age to stop working was at 70 years, or 25 years longer than the life expectancy of the time.

The concept of retirement is universal. But if the retirement age defined by von Bismarck more than a century ago has changed little, life expectancy has taken the ascendancy almost everywhere in the world, especially since the 1960s.

This massive increase in life expectancy means that pensioners in industrialized countries today can expect to receive old-age pensions for at least 10 to 25 years on average.

Among women, who generally have a higher life expectancy than men, this difference between the statutory retirement age and life expectancy is even more pronounced.

However, the pension system is currently under pressure in the industrialized countries. The constant increase in life expectancy coupled with the constant decline in the birth rate means that there are fewer and fewer active workers to finance more and more pensioners. This is compounded by the fact that poor returns on the financial markets reduce the wealth of pension funds.

In this context, one of the recommended solutions to avoid financial strangulation is to increase the retirement age. This debate is taking place not only in Switzerland but in many other developed countries. And everywhere, the idea of working longer raises criticism and resistance.

However, the statistics make it possible to put the situation into perspective. Indeed, in many countries, work is already being done beyond the statutory retirement age. In Switzerland, for example, the average retirement age is 66.3 years, while the legal age is currently 64 for women and 65 for men. In other European countries, such as Germany and Spain, workers leave the labor force several years before the official age.

Statistically, the idea of retirement at 67 is almost already a reality in Switzerland. Fixing the official age at 67 should therefore only be a formality. But it would overlook that these are only averages that reflect very different realities. Although in some professions there is a tendency to work beyond the legal age, it often occurs earlier in professions with great physical and/or emotional stress. Added to this is the fact that for many employees it becomes difficult to find a new job after 50 years and almost impossible after 55 years.

Life expectancy is only one aspect of the problem. Early retirement options, the integration of older workers into the labor market or the level of contributions are other aspects of an equation with several unknowns.



Translated from French by John Heilprin

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