Popular initiative for a 13th AHV pension: The most important facts in brief
Published: Sunday, Mar 3rd 2024, 04:50
Updated At: Sunday, Mar 3rd 2024, 04:51
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This Sunday, the people and cantons will decide on the popular initiative "For a better life in old age (initiative for a 13th AHV pension)". The initiative was launched by trade unions. Here are the most important facts about the initiative in brief:
The initial situation
Old-age provision consists of the AHV (first pillar), the pension fund (second pillar) and any payments into private pension provision (third pillar). AHV pensions are paid out every month, twelve times a year. The minimum pension for unmarried persons is CHF 1225, the maximum CHF 2450. Married couples receive a maximum AHV pension of 3675 francs. The pension is calculated on the basis of contribution years, earned income and child-raising and care credits.
AHV pensions are generally adjusted for inflation every two years based on the arithmetic mean of the price index and the wage index (mixed index). In March 2023, the councils did not approve a proposal to fully compensate for inflation, after they had called for full inflation compensation for AHV pensioners in 2022 during debates on purchasing power.
The AHV reform, which was approved at the ballot box in 2022, will gradually increase the retirement age for women from 64 to 65 from 2025. The increase in value-added tax from the beginning of 2024 should generate more income for the AHV and thus stabilize it financially for the coming years. Parliament has already ordered the next reform bill to further stabilize the AHV.
This is what the initiative
The popular initiative for a 13th AHV pension calls for a "thirteenth" for the old-age pension, as many working people know it. Specifically, all pensioners should be entitled to a supplement equal to one twelfth of their annual pension, which would be 8.3 percent higher than today. Anyone already drawing an AHV pension should receive the supplement from 2026 at the latest.
The initiative committee expressly wants to ensure by law that supplementary benefits are not reduced because of the "thirteenth", or that the entitlement to supplementary benefits to the AHV remains in place because of the supplement. The initiative makes no stipulations regarding the financing of the 13th AHV pension.
The initiative committee/the supporters
The initiative is backed by trade unions and left-wing parties. In their view, no additional funding of the AHV is necessary until around 2030 in order to finance a 13th pension. For the period after that, wage contributions of 0.4 percent each for employees and employers would be sufficient to pay the higher pensions. The AHV is in a better financial position than the opponents of the popular initiative predict.
The initiative committee argues that the 13th pension is necessary to compensate pensioners with low and medium incomes for inflation and rising health insurance premiums. Women, who often work for less pay, would benefit in particular. Inflation and health insurance premiums have led to the loss of an average monthly AHV pension since 2021. It is about securing the standard of living.
The opponents
The Federal Council and Parliament recommend a No to the initiative. According to the Federal Council, a Yes vote would result in additional expenditure for the AHV of CHF 4.1 billion when the 13th AHV pension is introduced and of around CHF 5 billion five years later due to the increasing number of pensioners and longer life expectancy - in addition to the forecast contribution deficit of CHF 4.7 billion.
The conservative No alliance of the SVP, FDP, Center Party and GLP calls the 13th AHV pension based on the watering can principle unsocial and expensive. It would have to be financed through higher wage contributions, an increase in VAT and with tax revenue, which would place a burden on young families and single parents in particular. Economiesuisse, the employers' association, the trade association and the farmers' association also recommend a no vote.
In December, the National Council approved a motion from the GLP parliamentary group calling for a targeted pension increase for those in need. The Council of States has yet to decide on a corresponding motion. Social Affairs Minister Elisabeth Baume-Schneider also advocates targeted support measures for pensioners in a precarious financial situation.
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