Federal Council and Parliament face a shambles after BVG rejection
Published: Sunday, Sep 22nd 2024, 18:30
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The resounding "no" to the pension fund reform shows once again that complex reforms in old-age and occupational pension provision have a difficult time. Ideas on how to proceed differ widely. Solving the reform backlog is likely to remain difficult.
The verdict on the BVG reform was overwhelmingly clear on Sunday: 67% of voters said no. All cantons rejected the bill. Only 26 out of 2126 municipalities were in favor of the pension fund reform. The no vote at the ballot box came as no surprise in view of the polls prior to the vote. However, the clarity of the result is surprising.
Lukas Golder, political scientist at gfs.bern, spoke on Swiss television SRF of a "slap in the face" and a "slap in the face" for the Federal Council and parliament. Golder's colleague Urs Bieri analyzed that there was no common awareness of the problem.
"We have to adapt the system"
The proposal for the reform of the second pillar was highly controversial during the referendum campaign. Supporters spoke of a "good compromise", while opponents described the reform as "terrible". Among other things, the focus was on the complexity of the bill. The incorrect AHV figures published by the federal government were obviously also grist to the opponents' mill.
The No vote means that the backlog of pension reform remains. Since the introduction of the second pillar in 1985, the Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans (BVG) has only been comprehensively reformed once, namely in the noughties. Since then, several attempts at reform have failed. Now work is starting again on field one.
Interpretations of the result of the vote differed on the evening of Sunday, as did ideas on how to proceed. Social Affairs Minister Elisabeth Baume-Schneider announced that she would make contact with the most important players. The Federal Council, Parliament and the social partners must assume their responsibilities. "We have to adapt the system to new circumstances."
SP presents three-point plan
Because the AHV is also in trouble, the principle of "pension security before benefit expansion" must now apply, said the supporters of the BVG reform. Solutions still need to be found for part-time workers and people with several employers. Wage contributions for older employees should also be adjusted to increase their chances on the labor market.
However, the Swiss Federation of Trade Unions (SGB), which had led the referendum against the bill, announced that the result of the vote was a very clear signal to federal politicians and pension funds. A majority of voters were of the clear opinion that the pension level in Switzerland could not be reduced, especially for middle-income earners.
The SP has named three key points for a new approach to pension fund reform. Firstly, it wants lower returns for banks and insurance companies. In addition, an inflation adjustment for existing pensions is needed in future to protect purchasing power, as well as better pensions for women. The party wants to achieve this specifically through the introduction of care credits in the second pillar. The Greens also supported this demand on Sunday.
Focus on small reform steps
For the SVP, however, the No to the BVG reform means that the population "does not want any BVG experiments". The plans of the left are completely irresponsible, the party wrote. The proven three-pillar model would be driven to the wall financially.
The Swiss Employers' Association (SAV) also immediately opposed all expansion plans. The Swiss Trade Association (SGV) went further. Following the "no" to the BVG reform, it wants to advocate a gradual increase in the retirement age.
Baume-Schneider told the media that the Federal Council's next priority will be smaller reform steps. The lowering of the entry threshold and the adjustment of the coordination deduction planned with the BVG reform could soon be on the agenda again.
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