A group of mainly Social Democratic members of parliament want to use the interest from National Bank monetary reserves to top-up the federal old age pension scheme.

A group of mainly Social Democratic members of parliament want to use the interest from National Bank monetary reserves to top-up the federal old age pension scheme.

The current scheme, which is paid for 50-50 by contributions from employers and employees, gives subsistence-level pensions to the retired. It is the mainstay of the welfare system in Switzerland, and in previous years there have been worries about financing the system by the middle of the century.

The government says if the scheme runs into financial trouble, value added tax could be raised by up to two and a half points.

Meanwhile, the right-of-centre People's Party wants to use the proceeds from the sale of part of the national gold reserves for the pension scheme. Even though only half of the country's 2,600 tonne gold reserve is earmarked for sale, the present unsatisfactory gold price does not make this an attractive prospect.

The group of prominent Social Democratic parliamentarians is suggesting that the National Bank's SFr100 billion monetary reserve should be tapped instead. They say if this money was invested in a hard and fast professional way, it would accrue SFr4-5 billion in interest annually.

This is sufficient to offset any possible shortfall in the pension scheme, and would prevent the need to raise value added tax.

Both the government and parliamentarians have to take into account scenarios involving differing long-term economic prospects. The parliamentarians say if economic growth is not up to scratch, a federal tax on inherited money could be envisaged.

Politically, the left-of-centre proposals are aimed against the neo-liberals and global players in the People's Party. The Party not only favours selling part of the national gold reserves, but is seeking to raise the retirement age, and is also not ruling out cuts in the federal pension scheme.

But all these proposals, as well as the reforms foreseen by the 11th revision of the federal pension scheme, about to be debated in parliament, will ultimately be decided on by the people in a national referendum.

by Peter Haller

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