Should we work until 66 to secure long-term pension funding?
On March 3, the Swiss people will vote on a popular initiative aimed at raising the retirement age. What is your opinion? Is an increase necessary or not? Join the discussion on our debate platform "dialogue".
“The OASI (old-age and survivors’ insurance) is running out of money”. This slogan is the first thing that catches the eye when visiting the website of the supporters of the Pension Initiative, which was put forward by the Young Radical-Liberals. They argue that the state pension scheme urgently needs to be put on a sustainable footing to prevent it from collapse.
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Their solution to guarantee long-term financing of the OASI? The statutory retirement age for everybody should be gradually increased from 65 to 66 by 2033. After that, it would be pegged to life expectancy, meaning it would be raised (or lowered) automatically if life expectancy increases (or decreases).
Politicians from left to right agree that the number of pensioners is increasing faster than the number of workers who pay into the OASI scheme. Also, as life expectancy increases, pensions will have to be paid out for longer. According to projections by the Federal Social Insurance Office (FSIO), the OASI will be in the red from 2031.
The Federal Council – Switzerland’s executive body – does not support the Pensions Initiative and points out that it is already drawing up a plan to stabilise the OASI for the 2030 to 2040 period. The centre and left-wing parties and the trade unions also reject the initiative. Those opposed to the initiative also argue that the demographic problem facing the old-age provision system cannot be resolved solely by raising the retirement age. Other measures are needed, including additional funding.
The old age and survivors’ insurance (OASI) is the most important social programme in Switzerland. It is the compulsory state old-age insurance scheme and is intended to enable everyone to reach old age without poverty. Its purpose is therefore to secure basic needs.
This is also enshrined in the Swiss constitution. It states that the OASI must “adequately cover basic needs”.
The OASI is based on the pay-as-you-go system. Money collected by the OASI from the working Swiss population flows directly to pensioners.
It is therefore not set aside and paid out later and is also referred to as an intergenerational contract: the working generation finances the generation of pensioners.
In principle, everyone who lives or works in Switzerland is insured and liable to pay contributions to the OASI.
Adapted from German by Claire Micallef
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