Unions want more state money for pensioners

Many pensioners struggle on their current income Keystone

The Swiss Federation of Trade Unions is calling for the state to guarantee a minimum pension of SFr3,000 ($2,488) a month for retired people.

The Federation says around half of Switzerland’s pensioners currently have to make ends meet on considerably less than that sum, which is considered the minimum to meet basic needs.

The Federation said on Monday that its proposals, which would push up the state’s pension bill by an estimated extra SFr3.7 billion, were aimed at shoring up the “first pillar” of Switzerland’s three-tier pension system, and helping those on low incomes.

The second tier – occupational pensions – is also compulsory, but only for those earning more than SFr19,350 a year. Private schemes and savings make up the third pillar.

Experts commissioned by the Federation found that one in two retirees lived on less than SFr3,000 a month, while a quarter had to get by on less than SFr2,000. Women were found to suffer more hardship than men.

The Federation’s working group developed a new model for pension financing aimed at guaranteeing a monthly income of SFr3,000 for individuals and SFr4,500 for couples – the minimum amount estimated to cover basic needs.

Fair and flexible

The group recommend that the first pillar provide the lion’s share of retirement income, since workers with low pay could expect little from their occupational schemes.

It added that state pensions provided better protection against financial risks, and could also be more fairly distributed. The authors said the first pillar should be strengthened by reducing second pillar contributions by up to 20 per cent.

As a result, the gap between maximum and minimum state pensions would be reduced, and lower pensions would also be topped up.

Retired people would receive a monthly state pension worth at least SFr1,500, plus added benefits for those who fell short of the minimum income requirement.

Switzerland’s pension system has been under scrutiny in recent years, amid suggestions that the retirement age be raised. The government also wants to reform the pension system.

Both proposals have met with strong opposition, particularly from the unions who fear that state benefits could be cut.

swissinfo with agencies

Key facts

The Federation says half of retirees subsist on less than SFr3,000 a month.
It wants a minimum of SFr3,000 for single pensioners and SFr4,500 for couples.
The increased cost to the government – SFr3.7 billion a year – could be partly offset by reducing contributions made to occupational schemes.