New old age pension scheme squeaks through parliament

The interior minister, Ruth Dreifuss, pleaded the government's case on the final day of the session Keystone

The Swiss House of Representatives has narrowly approved the government's plan to revamp the old age pension scheme, following three days of debate. The issue may still go to a referendum.

In the final vote on the law, 62 members voted in favour, 60 against and there were 63 abstentions. Analysts said few of the parties were satisfied with the result.

The interior minister, Ruth Dreifuss, said she did not wish to dramatise the result of the vote. “It’s a tactical vote, we all wanted to keep open the option of holding a referendum at the end of the parliamentary process,” she said.

The issue, which still has to be debated in the Senate, could be the subject of a referendum. The centre-left Social Democrats and trade unions are considering calling one.

The special session of parliament was devoted to the issues of retirement ages and how to pay for the cash-strapped pension scheme.

Parliamentarians voted in favour of raising women’s retirement age progressively so that it will be 65 from the beginning of 2009.

On the final day, members of parliament seeking to raise funds for the pension scheme voted in favour of a hike of 1.5 per cent to Value Added Tax.

Perhaps most controversially, parliamentarians decided to cut back the funding of an early retirement scheme. The decision means that people who retire early will lose up to 16 per cent of their pension.

In a tight ballot, decided by the speaker’s casting vote, members of parliament decided to allocate only SFr400 million to the scheme – just over half the original proposal.

As a result, pensions will be reduced between 11.3 and 16.5 per cent if the people involved want to retire at 62. People who decide to retire later will lose less.

The majority of opposition to the revision of the pension scheme came from the centre-left Social Democratic Party, the Green Party and several independents..

Switzerland’s social security system was introduced in 1948, and the state pension scheme is mainly funded by mandatory contributions from the salaries of the working population, as well as employers, government subsidies and taxes.

Because of Switzerland’s ageing population, the number of Swiss pensioners is growing disproportionately compared to the working population, as in most other Western countries.

The statutory retirement age for men in Switzerland is currently 65, while women get their pension at 63.

swissinfo with agencies