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Government approves revision of pension scheme

The Swiss cabinet has approved the latest revision of the old age pension scheme which foresees a cut in government expenditure of SFr1.3 billion. The Interior minister, Ruth Dreifuss, (pictured) presented the proposals to the cabinet

The Swiss cabinet has approved the latest revision of the old age pension scheme which foresees a cut in government expenditure of SFr1.3 billion. The Interior minister, Ruth Dreifuss, (pictured) presented the proposals to the cabinet.

The aim of the 11th revision of the old age pension scheme is to consolidate the progress that has been made since it was first introduced in 1948 and to maintain a flexible retirement age, Dreifuss told reporters.

The retirement age for both men and women will be 65 under the proposals. It is currently 62 for women and men have the opportunity to retire at that age but with a reduced pension.

The cabinet approved a series of measures to make up the financial shortfall. They include:
– A two-tier increase in Value Added Tax. The first VAT increase of 1.5 per cent could take effect in 2003, and the second one per cent rise would occur in 2006.
– Part of the money from the National Bank’s excess gold reserves would be used for the old age pension and invalidity insurance schemes.

The proposals on pensions allow people to retire at 62 with a reduced pension, or at the age of 59 with half the normal pension. People on lower incomes will face a smaller cut in their pensions than people on high incomes.

Parliament will have to decide on the proposals, including the rise in Value Added Tax, and the issue is then likely to face a referendum

From staff and wire reports

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