Pension reform vote aims to raise retirement age for women

The reform provides for an increase in the legal retirement age for women, which would be partly offset by financial compensation. Keystone/Christian Beutler

On Sunday, voters have the final say on a proposal to reform the basic pension scheme in a ballot billed as a key decision in Swiss politics.

This content was published on September 24, 2022 – 10:00

Supporters of the legal amendment, which includes raising the retirement age for women from 64 to 65, as well as an increase in value added tax (VAT), had more than 20 percentage points in advance, according to the most recent surveys, published last week.

Polling stations close at noon on Sunday and the final results are expected a few hours later.

The challenge is to overhaul the mandatory old-age pension scheme for men and women to ensure its long-term financing and adapt it to the aging of the population and the reduction in the workforce.

The scheme, introduced in 1948, is funded by payroll deductions under a pay-as-you-go system. It is part of the Swiss social security system, which consists of two additional pillars: occupational pensions and individual savings.

Beneficial to all

A majority in parliament, the government and the business community have come out in favor of the reform. They argued that the public pension system, also known as the first pillar, is under threat and needs additional funding to the tune of 18.5 billion francs ($19.2 billion) over the next ten years to prevent it from collapsing.

Interior Minister Alain Berset said the much-needed reform is the result of a political compromise and includes severance pay and flexible retirement incentives.

“A well-funded pension system is in everyone’s interest, including women,” he said.

Campaigners also stressed that the reform is an act of solidarity from consumers, who should pay a higher rate of VAT on goods and services to secure the future of Switzerland’s main social security scheme.

Women will pay the price

The Social Democratic Party and its traditional allies, the trade unions, as well as the Greens, contested the parliamentary decision in a national vote by collecting the necessary number of signatures.

“There is no need for a reform that is to the detriment of women,” says Vania Alleva, president of the Unia union. “Wage discrimination between men and women must first be eliminated.”

Opponents also argue that the authorities’ financial forecast for the pension fund is too pessimistic.

An increase in consumption tax in times of rising prices, especially for electricity and health insurance premiums, would weigh more on purchasing power, according to the political left.

Mutual accusations

The base on both sides appears to have made up its mind at an early stage in the campaign, as the issues at stake have been on the political agenda for years.

Nonetheless, emotions have been running high in recent weeks, with supporters and opponents trading accusations of spreading misleading information and engaging in fearmongering.

Turnout on Sunday is expected to be at an average level of around 44%, according to Lukas Golder of leading research institute GfS Bern. The political scientist says the campaigns generally lacked emotional intensity compared to those in 2021, when a proposal to ban pesticides in agriculture and the government’s anti-Covid policy were on the ballot.

It is primarily the older citizen segment that actively participates at the polls consistent with traditional voting behavior, according to Golder.

Over the past 25 years, a series of proposals to reform the pension system have been rejected by parliament and/or voters, the last in 2017.

At least three other proposals are in the political pipeline to reorganize the Swiss old-age pension system. They include the use of National Bank surpluses and an additional monthly pension to help less well-off elderly beneficiaries. Another initiative aims to raise the retirement age for men and women to 67 and bring it in line with average life expectancy.

Votes on September 25

Voters have the final say on four issues. Ban on factory farming, raising the retirement age for women to 65 and increasing VAT (both as part of an overhaul of the public pension system) as well as a reform of the source.

This is the third and final round of national votes this year.

About 5.5 million citizens, including registered Swiss expatriates, can vote.

Votes on a wide range of different issues also take place in many cantons and municipalities across the country.

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