Parliament has approved plans to set the retirement age for both men and women at 65 years, as well as reduce pension benefits for certain groups.This content was published on September 25, 2003 - 13:00
The changes to the state pension scheme were agreed despite fierce opposition from centre-left and Green parties.
Under the reforms, due to come into force in 2009, the retirement age for women will be raised from the current 63 to 65 years. The retirement age for men will remain at 65.
Raising the retirement age for women to 65 will save the government around SFr445 million ($330 million) a year.
The decision follows an earlier revision of the pension law that will see the retirement age for women rise from 63 to 64 in 2005.
In addition, anyone who retires early will have to settle for a lower pension.
The measures - passed by the Senate and the House of Representatives on Thursday - are part of an ongoing revision of the state pension scheme designed to tackle the problem of Switzerland’s ageing population, caused by a falling birth rate and higher life expectancy.
Earlier this year, the Swiss interior minister, Pascal Couchepin, added fuel to the heated pensions debate when he proposed raising the retirement age to 67 by 2025 and reducing state pension benefits.
Tempers were re-ignited on Thursday ahead of the vote during a debate in the House of Representatives.
“[These revisions amount to] a total dismantling of the welfare state to the detriment of women, widows and pensioners,” said the Social Democrats' Paul Rechsteiner, who is also president of the Swiss Federation of Trade Unions.
The Social Democrats have threatened to challenge the reforms in a nationwide vote.
Widows - especially those without children - are among the hardest hit by the latest revision, receiving a smaller payout from their deceased husband's pension.
However, pension cuts for widows with children will be offset by an increase in child benefits. Both changes will be gradually phased in after 2006.
In a compromise solution for women taking early retirement, those born between 1948 and 1952 will be able to take early retirement without seeing their pensions slashed.
Switzerland’s pension scheme is based on a “three-pillar” system.
The first pillar is the state old-age pension. All people living and working in Switzerland have to contribute to the scheme and it is the minimum cover guaranteed by the state.
The second pillar, the occupational benefit plan or company pension, is also compulsory, but only for those earning more than SFr25,000 a year.
The third pillar is individual private pension plans, which can be either non-indexed linked or indexed linked.
Earlier this month, parliament approved reforms to the second pillar, and will extend occupational pension entitlements to workers earning a minimum of SFr18,990 a year.
The government says this will effectively entitle a further 100,000 people to a company pension, most of whom are women.
swissinfo with agencies
State spending on pensions is expected to rise dramatically until 2040 due to demographic changes.
The latest reforms are part of an ongoing revision to the state pension scheme, which aim to counter the effects of Switzerland’s ageing population.
Women will see their retirement age rise from 63 years currently to 64 in 2005 and to 65 in 2009.
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