The Swiss Times - Swiss News in English

The Federal Council’s approach to financing the 13th AHV pension is controversial

The Federal Council wants to pay out the 13th AHV pension from 2026. To finance this, it has agreed on a way that can be implemented quickly via salary percentages and, if necessary, an increase in VAT. Reactions show that the proposals are likely to have a difficult time.

The popular initiative launched by trade unions for a 13th AHV pension was approved by the people and the cantons on March 3, with around 58% voting yes. This means that around 2.5 million pensioners will receive a 13th AHV pension from 2026. This corresponds to a pension increase of 8.3 percent compared to today.

Two variants

This will cost CHF 4.2 billion in the year of introduction. Five years later, it is likely to be around CHF 5 billion due to the growing number of pensioners, as Social Affairs Minister Elisabeth Baume-Schneider told the media in Bern on Wednesday.

The Federal Council has set key figures for financing the 13th pension and agreed on two options: the first is an increase in salary contributions to the AHV by 0.8 percentage points. The second is a combination of a 0.5 percentage point increase in salary contributions and a 0.4 percentage point increase in VAT.

In view of the federal government's strained financial situation, the national government is planning to temporarily reduce the federal contribution to the AHV. While the federal government currently pays 20.2% of AHV costs, it plans to reduce this to 18.7% from 2026 and until the next major AHV reform comes into force.

Less money from the federal government

With the current federal contribution, the federal government would have to bear an additional CHF 840 million in costs when the 13th pension is introduced in 2026 - around a fifth of the additional costs. With the lower contribution, it would be correspondingly less. This is also to be compensated for with salary contributions and possibly more VAT.

Criticism of the proposals followed immediately: middle-class circles rejected the proposal to finance the 13th AHV pension solely through wage contributions, while the SP and the Swiss Federation of Trade Unions (SGB) favored this approach. According to the SGB, financing via salary percentages protects purchasing power the most and points to falling social security contributions.

The employers' association, the trade association and Economiesuisse would like to see financing only through an increase in VAT. This would be fairest from the point of view of intergenerational fairness. According to Economiesuisse, the additional costs would be borne as widely as possible. And the SVP wants to finance the 13th AHV pension with savings in the area of asylum and development aid.

©Keystone/SDA

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