Plans to raise the retirement age for women by one year and facilitate early retirement for the less wealthy have failed in parliament.This content was published on October 1, 2010 - 13:39
An alliance of rightwing and centre-left parties threw out a reform of the state old age pension scheme – one of the main tenets of Switzerland’s social security system - in the final reading of the bill on Friday.
The reform was aimed at increasing revenue of about SFr800 million ($817 million) a year by raising the retirement age for women to 65, in line with that of men, to shore up the scheme.
About SFr400 million would have been spent on early retirement schemes for low-income earners.
Friday’s vote puts an end to 12 years of discussion on the latest proposals for reforming the pension system. Reform is seen as essential owing to the ageing of society.
Interior Minister Didier Burkhalter, who is in charge of social security, warned ahead of the vote that rejection of the reform would solve no problems.
“On the contrary, a new round of reforms will have to be prepared which will necessarily be more comprehensive,” Burkhalter was quoted as saying in newspaper interviews.
His ministry announced new proposals would be launched shortly, including plans for a more efficient administration, to avoid the pension scheme running up debts.
Centre-right parties in parliament which supported the reform described the rejection as a “black day for pensions”.
They stressed the bill was a balanced compromise where all sides were required to make concessions.
They accused the centre-left Social Democrats and the Greens, as well as the rightwing Swiss People’s Party, of putting the pension system at risk.
“Those who vote No gamble away the future of pensions,” said Brigitte Häberli of the Christian Democratic Party.
The centre-left parties dismissed the criticism, saying the centre-right only had itself to blame for the mess it had created.
“The proposals are bad for women, bad for pensioners, bad for married men and bad for the population,” said Social Democrat Paul Rechsteiner.
His party claims the latest reform would not have done enough to help low-income earners and would indeed have led to a general reduction in pension benefits.
But the rightwing Swiss People’s Party argued the planned reform did not go far enough and included unnecessary expenditure on flexible retirement.
The reform created problems for the next generation, according to Toni Bortoluzzi. He called for an end to “experiments and additional spending”.
Critics have pointed out that the People’s Party had backed the bill during debates in parliament and made a U-turn only in the run-up to the final vote.
This is widely seen as a tactical move by the party to deny the centre-left a possibly easy victory at the ballot box – and a successful popular campaign to coincide with next year’s general election.
The Social Democrats, who won a referendum six years ago against a similar reform, threatened to challenge the new bill to another nationwide vote.
Several years ago a former interior minister caused a public uproar when he suggested raising the retirement age to 67 to make up for the growing number of beneficiaries caused by the ageing population.
The state-old age pension scheme was introduced in 1948 and has undergone ten reforms since.
It is one of the main tenets of Switzerland’s social security system and is often referred to as the first pillar of the old age provisions, which also include occupational pensions and personal savings.
The retirement age for men and women was initially set at 65. In 1964 women became eligible for retirement at the age of 62 and by 1994 the age was raised to 64.
In 2004 voters rejected an increase in women’s retirement age to 65 and a hike in VAT. In 2008 a proposal to introduce a flexible retirement age without loss of benefits failed at the ballot box.
Funding and terms
The scheme is funded mainly through employee salary deductions and employers’ contributions.
Payments come from taxes on alcohol and tobacco as well as VAT. Cantons also contribute to the scheme.
The current annual pensions range between SFr13,680 and SFr27,360.
Employee contributions are mandatory from the age of 18 (21 for those without gainful employment) for all Swiss citizens and foreigners working for a Swiss company.
The rules apply also for Swiss citizens working for a Swiss company based abroad and for expatriates.
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