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Swiss government rejects union demands for pension increases

 

Swiss government rejects union demands for pension increases

© Anne Barroil | Dreamstime.com

20 Minutes.

Various Swiss unions along with the socialist and green parties have launched an initiative to increase pensions. Their plan, which demands a 10% increase in pension payments, will be put before Swiss voters in a referendum on 25 September 2016.

The cost of the plan could be as high as CHF 4.1 billion. Those behind the vote propose increasing social security taxes by 0.8% to fund the rise. Pension increases would equate to an extra CHF 2,400 a year for someone living alone and CHF 4,200 for a couple.

The Swiss government rejects the plan on the grounds that it competes with existing plans to reform Swiss pensions.

As Switzerland’s population ages, the pension funding gap will grow as the number of workers paying into the system declines relative to the number of pensioners. To deal with this problem, the government has developed a plan called « Old age pension 2020 ». The main elements of this plan are to increase in the retirement age of women to 65, in line with men, reduce pension payments, and increase VAT by up to 1.5% to fund the gap between inflows and outflows.

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Investec is a distinctive Specialist Bank and Asset Manager. We provide a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other geographies. Investec’s strategic goals are motivated by the desire to develop an efficient and integrated business on an international scale through the active pursuit of clearly established core competencies in the group’s principal business areas.
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