Pay-outs by Switzerland’s main state pension plan, which comprises old age insurance and other schemes, far exceeded income last year.
Overall, the old age pension scheme recorded a deficit of CHF2.2 billion ($2.2 billion) in 2018 compared with a surplus of CHF1.1 billion the previous year, according to compenswissexternal link, the Federal Social Security Funds.
Pay-outs to people receiving disability insurance exceeded income by CHF237 million, the organisation said in a statement on Mondayexternal link.
Compenswiss said the result was partly due to the negative performance of financial markets in 2018.
In total, assets belonging to the social security funds shrank to CHF34.4 billion, down CHF2.5 billion compared with 2017.
The government has proposed various measures to stabilise the state finances. It says it will run out of assets by the end of 2030 if no measures are adopted to improve the funding imbalance for state pensions.
Parliament is due to resume discussions on a proposal later this year, following voters’ rejection of a previous pension reform plan in 2017.
Next month, voters will also have the final say in a referendum on an additional CHF2 billion cash boost for the old age pension fund. It is linked to a reform of the corporate tax system.
Three pillar system
Switzerland’s social security system comprises a state pension plan made up of various insurance schemes such as the Old Age and Survivors Insuranceexternal link (OASI), Disability Insurance, and Unemployment Insurance.
OASI and disability insurance are mandatory for all Swiss residents.
This first pillar is complemented by a second pillar based on occupational pension plans and accident insurance, and a third pillar of private investment options.