Golden windfall for state pension scheme

The state pension scheme is in line to benefit from the gold bonanza Keystone

The Senate has voted to allow SFr7 billion ($5.4 billion) from the sale of excess National Bank gold to be spent on Switzerland's state pension scheme.

The House of Representatives accepted the proposal last week, but the final decision depends on the outcome of a related nationwide vote, likely next year.

The senators adopted the government’s compromise proposal without a debate but the result is an interim decision.

In January 2005, the centre-left Social Democratic Party launched a people’s initiative which goes further than the government’s proposal.

The sale of 1,300 tons of excess gold raised a total of SFr21 billion. The state pension scheme is set to receive a third of this, the cantons have already received two-thirds.

On top of allocating the one-off SFr7 billion payment to the state pension scheme, the initiative requires that all future profits of the Swiss National Bank also be diverted to the pension fund, less SFr1 billion for the cantons.

The government, which prefers to set the commitment at just the SFr7 billion payment, put its proposal to parliament as a way of sidestepping the Social Democrats’ initiative.

On hold

The interim decision will remain on hold until the people’s initiative is either withdrawn or defeated at the ballot box. A nationwide is likely to be held in May 2006.

The organisers of the initiative have ruled out withdrawing from the referendum process. If the referendum takes place and is accepted, Thursday’s decision will become invalid.

Since 1997, parliament and Swiss voters have been asked to decide on a number of proposals on what to do with the proceeds from 1,300 tons of excess gold.

In a nationwide vote in 2002, the electorate rejected a plan to set up a so-called Solidarity Foundation, which would have donated some of the money to humanitarian causes at home and abroad.

Parliament is also keeping the option open to use some of the money to prop up the invalidity insurance fund, which is currently running a large deficit.

swissinfo with agencies

In brief

The sale of 1,300 tons of excess gold by the Swiss National Bank was initiated in 2000 when the legal link between the Swiss franc and gold was abolished.

The cantons have received SFr14 billion from the proceeds of the gold.

The state’s SFr7 billion share will be poured into the state pension scheme if the related people’s initiative is withdrawn or fails at the ballot box next year.