Government proposes new pension reform guidelines

This will be the fourth attempt in two decades to reform the state pension system because of a structural deficit Keystone

The Swiss government on Friday fixed the outlines of a new state pension reform plan, including raising VAT to fund it, and raising the retirement age for women from 64 to 65. 

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The proposed reform is to be financed by an increase in VAT of up to 1.7%. Home Affairs Minister Alain Berset, who oversees social security and pension issues, is to submit a detailed proposal for consultation by lawmakers before the summer break. 

This comes after a previous pension reform plan presented by Berset was rejected by voters in September 2017. It will be the fourth attempt over the past two decades to amend legislation to remove a structural deficit in the state pension scheme.  

+Read more about previous attempts to reform pensions 

Under the latest proposal, the retirement age for women would be raised gradually, by three months each year after the reform comes into force. It would make the retirement age the same for both women and men. 

Three options are on the table to provide compensation to people affected, funded by VAT receipts or employee social insurance contributions or a combination of the two. 

The government says everyone should be able to choose flexible retirement between 62 and 70.  People will nevertheless be encouraged to keep working beyond 65.

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