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Swiss vote: ‘yes’ to higher pensions, ‘no’ to retiring later

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The Swiss have voted to boost pension payments to help elderly people. KEYSTONE/© KEYSTONE / ALEXANDRA WEY

The Swiss have voted to boost monthly payments for pensioners amid concerns over the rising cost of living in pricey Switzerland. A separate proposal to gradually raise the retirement age to 66 and beyond was clearly rejected in a separate nationwide vote.

On Sunday, 58.2% of Swiss voters backed the “Better living in retirement” initiativeExternal link, which proposes an additional monthly pension payment to help pensioners struggling to make ends meet in the face of inflation and rising living costs. The final results showed that a majority of cantons also supported the proposal.

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The initiative, launched by the Swiss Trade Union Federation and backed by left-of-centre parties, called for a 13th monthly pension payment each year from the old-age and survivors’ (OASI) state pension scheme – instead of the standard 12 – similar to the additional 13th monthly salary many employees receive in Switzerland.

The “yes” vote was more emphatic than earlier polls had suggested (up from 53% ten days ahead of the vote) and represents a historic victory in the Alpine nation: the first time that a left-wing initiative has been accepted to boost the Swiss state pension system.

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“The social pact in our country still works,” Pierre-Yves Maillard, president of the Swiss Trade Union Federation, told Swiss public television, RTS.

“This is a wonderful message to all those who have worked all their lives. It is the people who have the power in Switzerland. And I am very proud of our country and our democracy.”

Social Democrat parliamentarian Samuel Bendahan also underlined the historic aspect of the vote, calling it a “watershed”.

For once, “we are doing something for normal people” and not just the rich, he told the Keystone-SDA news agency. In a rich country like Switzerland, “everybody should be able to profit from the prosperity”. 

‘Protest vote’

In his analysis, Lukas Golder of the gfs.bern research institute described the result as a “protest vote”.

“People are protesting against a state that spends a lot elsewhere and finances a lot of things, for example defence and migration,” he told Swiss public television, SRF. “That prompted many in medium-sized businesses to say, ‘Now we can do something for ourselves that will broadly and effectively relieve the financial situation’ for pensioners.”

The issue sparked huge interest among voters: turnout was 58%.

Supporters had argued that the reform of the pension system was both affordable and urgently needed. Under the 13th pension payment initiative, a monthly pension will be paid 13 times a year from 2026. The maximum annual retirement pension will thus increase by CHF2,450 to CHF31,850 for individuals and by CHF3,675 to CHF47,775 for married couples. The extra month represents an increase of 8.33% in the state pension.

The reform had been fiercely fought by right-wing and centre parties, as well as the country’s main business groups, who had rejected it as financially unsound. The Swiss government and parliament had also officially opposed it.

Surprise

They had questioned how exactly such a reform – estimated by the government to cost CHF4 billion a year – could be financed and raised fears over the long-term sustainability of the entire state pension system.

Details on how the initiative will be implemented and funded – through higher social security contributions, taxes or other options – must still be ironed out by the Federal Council and parliament. The initiative text says nothing on this point.

Monika Rühl, director of Switzerland’s business lobby Economiesuisse, said she was surprised by the extent of the “yes” vote.

“It’s going to be a difficult time to find equitable solutions, especially from the point of view of young people,” she told RTS.

As for the solutions, “there are no miracles”, she declared. “We can increase salary deductions, increase VAT, or increase the federal government’s contribution, which I don’t really believe in given the state of federal finances.”

Céline Amaudruz, a parliamentarian from the rightwing Swiss People’s Party, said the right had “only itself to blame” for Sunday’s defeat.

“We have never been able to give answers in relation to the OASI or to health costs,” she told RTS. “There was obviously a need for a counter-proposal on this subject… that’s the result if you say ‘no’ to everything without making any proposals.”

‘No’ to retiring at 66…or later

In a separate pension vote on Sunday, 74.7% of Swiss voters rejected a people’s initiative aimed at gradually raising the retirement age from 65 to 66 over the next decade and then pegging it to life expectancy to ensure full financing of the state pension system.

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The proposal by the youth section of the right-wing Radical-Liberal party, entitled “For a Secure and Sustainable Old-Age Pension SchemeExternal link”, was supported by right-wing parties but failed to gain traction among a majority of the electorate.

Opponents – mainly on the left and in the centre of the political spectrum – had denounced it as “anti-social, technocratic and anti-democratic”, and “ill-suited for reforming old-age provision”. The “no” side accused the text’s backers of ignoring the reality experienced by senior citizens on Switzerland’s job market. People over 55 already have difficulty finding a job when they become unemployed, they point out.

Following Sunday’s results, the young Radical-Liberals sounded downbeat but combative. It was a “black day for young people”, the party said: the combination of the two vote results marked “the worst scenario for the future of the old-age pension system”.

Increasing life expectancy and more older people mean raising the retirement age is inevitable, it said – not admitting this is “cowardice in the face of reality”. It called on government and parliament to go back to the drawing board and present a plan to “renovate” the pension system.

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Debate
Hosted by: Samuel Jaberg

Where should the money come from to finance the 13th pension payment?

There are a number of proposals for financing the 13th monthly pension payment, which was approved in Sunday’s vote. What do you think?

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