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Pensioners group rejects “rich” label

Not all pensioners live the lives of wealthy bank clients Keystone

The Swiss Council for the Elderly has hit back at suggestions that pensioners should be penalised because they are financially better off than the working population.

The pressure group said the idea of a “solidarity contribution”, put forward by the Federal Social Insurance Office, was based on hasty conclusions and general prejudices.

Referring to a Geneva University study published last year, co-president of the council Christiana Jacquet-Berger told swissinfo that the results had been wrongly interpreted and painted an unfair picture of older people.

“We have no criticism to make about the quality of the research itself. However to draw conclusions from this research and to say that the older generation should be taxed is to forget that they are not all in the same situation.”

Jacquet-Berger said that older people were just as likely to be rich or poor as the rest of the population. “The economic differences are not between the generations but within the generations.”

The council commissioned Walter Rehberg from the St Gallen College of Applied Sciences to re-examine the original research and the economist presented his analysis in Bern on Friday.

“The poverty rate for young working people and retirees is almost identical at between 14 and 15 per cent,” he said.

Poverty trap

Rehberg pointed out that many younger people experience poverty only temporarily, whereas when older people become poor, they stay poor.

“It’s estimated that one-third of people will experience poverty at a given time in their lives,” Rehberg told swissinfo.

He gave the example of students who have just moved out of home and have few financial resources. “According to poverty definitions they are classed as poor but it’s clear that this is a transitional period in their lives.”

“On the other hand, older people do not have much possibility to earn more. When they are dependent on benefits to supplement their income, the only thing they might be able to do is work more, which depending on age and health is not always a relevant solution.”

Some 12 per cent of pensioners receive some form of income support from the authorities. But this does not represent the true number of people in need as many have not sought their full entitlements, according to campaigners.

“Not all the same”

One income support recipient Jasmine Elisabeth Jamin, who was widowed at a young age, is annoyed at how the elderly are perceived to have a wealthy lifestyle. The 72-year old did book keeping and translation work from home to keep the family afloat.

“For years I paid for the education of my three sons and I never got a penny from anyone, it was all from my own pocket. I worked day and night.”

“And now I’m in the situation that I wasn’t able to build up enough pension contributions from full-time work because I also had to look after the children and my pension is too low.”

“Yes there are older people who are well-off and can travel the world but by far not all of us,” Jamin said.

The statistics on this issue sometimes appear contradictory. Retired people have on average three times the assets of the working age population. But their income is only two-thirds that of the younger group.

According to Rehberg, many of the “wealthy” older people are only rich on paper, thanks to the value of the family home.

Helping out

The Council for the Elderly also drew attention to the contribution made by older people to society, in material terms such as tax or through financial gifts to their children, as well as non-material assistance such as childcare.

Globally, grandparents spend an estimated 100 million hours a year looking after children, which is worth an estimated SFr2 billion ($1.8 billion) to the economy.

In response to the claims of the lobby group, Yves Rossier – the director of the Federal Social Insurance Office – said that there was never any question of a tax specifically aimed at retired people.

However, he said that the groups most at risk of poverty had changed and that more money would be needed to address this demographic development. He added that working people should not have to shoulder this burden alone.

In 2007, some 12% of pensioners, or 156,000 people, had to rely on benefits to supplement their pension.

In the year 2000, older Swiss residents bequeathed or gifted SFr28 billion to family members.

In 2003, the older, retired generation possessed on average assets equivalent to three times the assets held by the working population.

The same year, pensioners had 67% of the average income of the working population.

Switzerland has a “three pillar” social insurance system.

The first pillar provides a basic old-age pension, a pension for surviving dependents and an invalidity pension for those unable to work for health reasons.

Everyone must contribute, whether working or not.

The second pillar is compulsory only for employed people. Employers and employees contribute.

The third pillar is optional: it is a savings scheme with tax advantages to provide extra benefits on retirement.

The number of people in work is decreasing while the number of pensioners is growing.

For every retired person, there are now only four people working. In 1900 the proportion was 1:10.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR