Plans for a flexible retirement age, but at what cost?

Raising the retirement age for women would reduce the state pension bill Keystone

Two similar proposals, which will be put to a nationwide vote on November 26, seek to introduce a flexible retirement age. The proposals come amid controversy over the funding of the state's old age pension scheme.

Supporters want to give people the option of retiring at 62 without losing their right to a full pension. Men in Switzerland are currently eligible for a pension at 65, while the retirement age for women is slightly lower.

The groups behind the two people’s initiatives are the Green Party and the associations of office workers, supported by the trade unions and the Social Democratic Party.

They say their initiatives are in line with labour market trends. They also point out that Switzerland, as one of the richest countries in the world, can afford such a privilege.

The government, parliament and three of the four main political parties say a flexible retirement age would cost an additional SFr2 billion (about $1 billion) annually and that this would cause the old age pension scheme serious financial difficulties.

The scheme is mainly funded by mandatory contributions from the salaries of the working population and employers, as well as government subsidies and taxes.

However, in recent years, strains have been showing in the pension scheme. The number of people paying into the fund has been falling while the number of elderly people has been increasing.

The debate about early retirement has led to a series of ideas, although they do not form part of the November 26 vote.

The government has already proposed introducing a flexible retirement age, but early retirement would lead to lower pensions.

Various parties and organisations have also put forward their own plans to ensure the future of the scheme. They include raising the age to 67, a higher rate of Value Added Tax or using the interest on the sale of the National Bank’s excess gold reserves to fill the pension scheme’s coffers.

Switzerland was one of the last countries in western Europe to set up a state pension scheme in 1948. In the first phase, the retirement age for women was gradually lowered to 62, while keeping men’s retirement age at 65.

In 1995, the electorate approved a proposal to gradually raise the age for women to 64, and the decision was confirmed in another vote three years later.

swissinfo