Switzerland Rejects Retirement Age Increase to 66, Approves 13th Month of Pension

Swiss Pension Reforms: A Deep Dive

In Switzerland, a country known for its high cost of living and aging population, the issue of pension reform is currently at the forefront. On a recent Sunday, the Swiss people voted on two crucial proposals affecting retirees: the introduction of a 13th month pension payment and the possibility of raising the retirement age. Swiss media outlets Le Temps and RTS projected that 75% of the population voted against the proposed gradual increase of the retirement age from 65 to 66 years. However, 58% of voters supported the concept of a 13th month pension payment. Furthermore, this proposal was accepted by a majority of the country’s cantons, a necessary step for its potential implementation.

Living Costs in Switzerland

Switzerland, a country often ranked among the most expensive in the world, caps its monthly social security pensions at 2,450 Swiss francs (approximately 2,570 euros) for a single person, and 3,675 francs for a married couple. In urban areas, the rent for a three-bedroom apartment can reach a minimum of 3,000 francs (about 3,150 euros). Everyday expenses such as a cup of coffee can cost over five francs. If the Swiss people approve this pension reform, they will follow in the footsteps of their neighbor, Liechtenstein. This similarly expensive country, which also uses the Swiss franc as its currency, adopted a similar system years ago.

“A Crisis of Purchasing Power”

Pierre-Yves Maillard, president of the Swiss Trade Union Federation (SGB), who campaigned for the “yes” vote, explains that Switzerland, like many other places, is experiencing a purchasing power crisis. The standard of living of retirees is deteriorating. Jakob Hauri, a retiree who was cited by the “yes” campaign, agrees, stating that the cost of living is rapidly increasing and the pension fund, which is supposed to guarantee the minimum subsistence level, is not keeping up. The initiative was supported by left-wing parties but faced strong opposition from right-wing and centrist parties, as well as the government and Parliament.

Government’s Concerns

The government expressed concerns that the proposed increase could potentially cost over four billion Swiss francs per year. This could necessitate tax increases and potentially threaten the financial stability of the social security system. The government also mentioned that the proposed change, which would affect all retirees regardless of their financial situation, might only bring limited social benefit. They argued that if the initiative is adopted, many retirees who do not actually need it would receive a 13th social security payment.

Opposition from UDC

The UDC, the country’s leading party with radical right leanings, warned that this “irresponsible” initiative could allow freeloaders to deplete the system. The party campaigned against the proposal, using advertisements, including one that depicted 100-franc notes being sucked into a manhole.

A Majority of the 26 cantons

The arguments against the proposal appear to have swayed the public’s opinion. In a recent survey conducted by gfs.bern for the public channel SSR, 53% of respondents said they supported the initiative, whereas 43% opposed it. This was a significant shift from a month earlier when 61% of respondents were in favor. For the initiative to be validated, it must win not only the popular vote but also secure a majority in at least half of Switzerland’s 26 cantons.

Raising the Retirement Age

Swiss voters also considered a proposal from the youth wing of the Liberal Party to gradually increase the retirement age from 65 to 66 over the next decade. The aim of this proposal is to ensure the long-term financial sustainability of the pension system. This vote took place less than two years after Swiss voters narrowly decided to increase the retirement age for women from 64 to 65, aligning it with that of men. Most people cast their votes in advance during the country’s regular polls.