Higher retirement age ruled out by Swiss government

A higher retirement age is currently not an option for the Federal Council Keystone-SDA

The Swiss government is not planning to increase the retirement age with the next package of pension reforms.

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However, the government wants to work towards ensuring that people remain in employment for longer. The initial direction of a reform for the years 2030 to 2040 have been outlined.

The pension scheme is facing expenses that it cannot cover with its current income. More and more older people are living in Switzerland, and more baby boomers will be retiring in the coming years.

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

The 13th pension payment that has already been decided will cost billions, and further costs could be incurred with the abolition of the pension penalty for married couples.

Without countermeasures, deficits in the billions are looming: according to estimates, the pension fund would have a contribution deficit of around CHF2.5 billion in 2030 and CHF5.7 billion in 2040.

With the financing of the 13th pension payment proposed by the Federal Council, the deficit would be CHF500 million in 2030 and CHF4 billion in 2040. However, this has not yet been decided. The Federal Council’s proposals are controversial.

Initial thrusts

However, it is undisputed that the state pension fund will need reforms from 2030. The Federal Council has set out the initial directions for this reform step. A higher pension reference age is currently not an option for the Federal Council.

It justified this with the “no” vote in the referendum on a higher retirement age in March 2024, stating that later retirement would also require a long transition period with compensation measures. According to the Federal Council, the pension fund would therefore not receive more money quickly enough to compensate for the retirement of the baby boomers.

However, with a view to the next reform, the Federal Council wants to examine the conditions under which a higher retirement age could be considered. It also wants to investigate whether a pension scheme independent of marital status would be possible.

The upcoming reform is intended to encourage people to work longer and thus provide the economy with more labour. Early retirement is to become less attractive and the maximum age of 70 is to be dropped. Today, early retirement is possible from the age of 63, or retirement can be postponed until the age of 70.

More income

The Federal Council is also considering adjustments in line with social change. It mentions individually calculated child-raising and childcare credits. The Federal Council wants to increase pension income via the current sources of funding, if necessary temporarily, in order to compensate for the retirement of the baby boomers.

Today, 72% of the fund is financed by salary contributions. In addition, there is money from value added tax and a contribution from the federal government. This is financed from the federal treasury as well as revenue from tobacco and alcohol taxes. The revenue from the casino levy also goes to the pension pot.

An intervention mechanism is also conceivable for the Federal Council. This could intervene if the fund’s financial situation deteriorates or if political decisions are not made in good time.

Consultation 2026

The Federal Council also wants to combat abuses, for example in connection with dividends for which no contributions have to be paid. It also wants to tackle digitalisation and wants the interior ministry to clarify how the data basis for future reforms could be improved.

The Federal Council now wants to examine the various approaches for the next reform and present guidelines next autumn. It intends to open the consultation process at the beginning of 2026.

Translated from French by DeepL/mga

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