The most important questions and answers on the pension initiative
Published: Sunday, Feb 4th 2024, 10:01
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On March 3, the people and cantons will decide on the popular initiative "For a secure and sustainable pension scheme (pension initiative)" launched by the Young Liberals. Below are the most important questions and answers on the proposal:
WHAT IS THE INITIAL SITUATION?
The retirement age for men is currently 65, while the retirement age for women will also be raised from 64 to 65 from 2025 and by 2028. Rising life expectancy is putting pressure on the AHV. The social security system has been temporarily stabilized thanks to the boost from the AHV/tax bill, which was approved by voters in May 2019, and the AHV reform adopted in September 2022 with the increase in the retirement age for women and the increase in value-added tax. However, according to federal figures, the AHV will slide into the red in the 2030s if no action is taken. Parliament has already ordered a further reform bill from the Federal Council. This should be ready by the end of 2026.
HOW DOES THE AHV WORK?
The so-called pay-as-you-go principle applies: what the working population pays in contributions is paid out to pensioners as a pension. Due to increasing life expectancy and the growing number of pensioners - not least because of the retirement of the baby boomers - fewer working people will have to finance more pensioners in future.
HOW HAS THE AHV DEVELOPED?
The framework conditions of the AHV have changed drastically since its introduction in 1948. Today, 44 years of employment are followed by an average of 22 years of benefit payments, compared to just 12.5 years in 1948. Moreover, today 3.5 working people still finance the pension of one retired person. According to federal forecasts, by 2050 there will only be around two working people.
WAS WILL DIE RENTENINITIATIVE?
The pension initiative calls for the retirement age in Switzerland to first be gradually increased from 65 to 66 and then linked to average life expectancy. The text of the initiative essentially contains a formula for calculating the retirement age in relation to life expectancy: the retirement age is to rise by 0.8 months for each month of additional life expectancy. The increase is to be announced five years in advance.
HOW WOULD THE RETIREMENT AGE DEVELOP IF YES?
Initially, the retirement age for women and men is to rise gradually to 66 by 2033. Thereafter, the retirement age is to be increased annually in steps of no more than two months. Based on the federal government's forecasts, the initiators have calculated that retirement age 67 is likely to be reached in 2043, retirement age 68 in 2056 and retirement age 69 in 2070.
WHAT ABOUT LIFE EXPECTANCY?
When the AHV was introduced in 1948, the life expectancy of a 65-year-old man was 12 years and that of a 65-year-old woman just over 13 years. In 2020, it was 19 years for 65-year-old men and 22 years for 65-year-old women. Despite a slight dip as a result of the Covid-19 pandemic, life expectancy is likely to continue to increase.
WHO LAUNCHED THE REFERENDUM?
The initiative was launched by the Young Liberals at the end of 2019. The initiative committee also includes federal parliamentarians from the FDP, including party president Thierry Burkart (AG), National Councillor Christian Wasserfallen (BE) and Councillor of States Andrea Caroni (AR). The initiators collected 145,000 signatures.
WHO IS IN FAVOR OF THE INITIATIVE?
The FDP has decided to vote in favor of the initiative, as has the SVP, although a majority of the largest parliamentary group was against it. The EDU also supports the initiative. Supporters also include major organizations such as the business umbrella organization Economiesuisse, the Swiss Employers' Association (SAV), the Swiss Trade Association (SGV), the Swiss Association of Master Builders (SBV) and the Swiss Insurance Association (SVV). Swissmem, the association of the Swiss tech industry, is also calling for a yes vote.
WHAT ARE THE ARGUMENTS OF THE ADVOCATES?
The proponents want an adequate pension for everyone in the country. This will no longer be possible in the foreseeable future with the current AHV system. Instead of increasing salary contributions or reducing pensions, the retirement age should be increased. This would restructure the social security system and secure it financially in the long term. Raising the retirement age would also combat the shortage of skilled workers and increasing immigration. The initiators want to allow industry solutions for early retirement, such as for physically demanding professions.
WHO IS AGAINST THE INITIATIVE?
The SP, Center Party, Greens, GLP and EPP oppose the initiative, as do the Federal Council and parliament. The Swiss Federation of Trade Unions (SGB) and Travail Suisse, the umbrella organization of employees, are at the forefront of the fight against raising the retirement age. Other major organizations are also involved.
WHAT ARE THE OPPONENTS' ARGUMENTS?
The demographic challenge facing the AHV cannot be solved by raising the retirement age alone, the opponents argue. The opponents also criticize the fact that the initiative provides for an automatic retirement age that is incompatible with Switzerland's political system. Neither the situation on the labor market nor the needs of the population would be taken into account. A political discussion on the retirement age must be possible. Critics also have doubts as to whether there are enough jobs available to employ the over-65s.
WHAT DO THE BOURGEOIS YOUTH PARTIES SAY ABOUT THE INITIATIVE?
When the pension initiative was launched, it caused a rift among the young conservative parties. The others accused the Young Liberals of having planned the initiative on their own despite prior consultation. Because they had only been asked afterwards, the young parties of the then BDP and CVP (now Junge Mitte), EVP, GLP and SVP refused to actively participate. Prior to the vote, only the Junge SVP Schweiz (Young SVP Switzerland) has so far decided on a "yes" position at national level. There are also cantonal sections of other bourgeois youth parties such as the Junge Mitte Bern and Zurich and the Junge GLP Zurich and both Basel.
WHAT IS AT THE CENTER OF THE REFERENDUM CAMPAIGN?
The two camps paint a different picture of the AHV's financial future. The proponents of the initiative claim that there is a risk of a pay-as-you-go deficit of over CHF 10 billion by 2050. The pension initiative would halve the pay-as-you-go deficit to around CHF 5 billion. The opponents of the initiative focus their arguments on the AHV fund. This is full to bursting. It will increase to around CHF 70 billion by 2030. There can therefore be no question of the AHV going bankrupt.
WHAT IS THE SITUATION ABROAD?
Many European countries have a higher retirement age than Switzerland, and in some this is already linked to life expectancy. The Netherlands, Spain, Denmark, Sweden and Germany, among others, have decided to raise the retirement age to 67 or more over the next ten years. Italy and Portugal, for example, already use a mechanism that links the retirement age to life expectancy.
WHAT CHANCES DOES THE INITIATIVE HAVE?
According to the first polls commissioned by SRG and Tamedia, the majority of the groups surveyed are currently against the initiative. Accordingly, at the beginning of the referendum campaign, only the FDP base supported the cause of its youth party. Voters from the SP, Greens, SVP and Center Party were against the initiative, while the GLP base was divided. The pension initiative is currently being rejected in all age groups, with the exception of the over-65s, who would no longer be affected by an increase in the retirement age.
WHICH SIDE INVESTS MORE MONEY IN THE CAMPAIGN?
According to figures from the Swiss Federal Audit Office (SFAO), the pro side with the "Pension Initiative Yes" committee budgeted around CHF 900,000 for the referendum campaign, while the contra side received around CHF 100,000 from the SGB and Unia.
HOW DID THE VOTERS DECIDE ON SIMILAR ISSUES IN THE PAST?
The idea of linking the retirement age to life expectancy is not new. However, there has not yet been a majority for this in parliament. Even among voters, a retirement age of over 65 was not considered to be capable of winning a majority. All popular initiatives on the subject of AHV have been rejected to date, including several to reduce the AHV retirement age. In the last OASI reform, which was voted on in September 2022, voters only narrowly approved an equalization of the retirement age for women to that of men.
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