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Vote to increase Swiss retirement age clears signature hurdle

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The youth chapter of the PLR (FDP) has successfully collected enough signatures for an initiative to raise the official retirement age in Switzerland to 66 years old, reported RTS.

On 16 July 2021, initiative organisers submitted 145,000 voter signatures as part of the formal process of launching a referendum in Switzerland. Under referendum rules a minimum of 100,000 valid signatures must be collected within 18 months.

The official retirement age in Switzerland is currently 65 for men and 64 for women, although the government recently passed laws to create a universal retirement age of 65 for both men and women. The federal government also agreed to increase VAT up to 8% to help improve pension system finances.

The perilous state of Switzerland’s state pension system is well known. People are living longer and the nation’s population is ageing, leaving fewer working-age tax payers to fund the pensions of a rising number of retirees. Without reform a funding shortfall of CHF 200 billion is forecast over the next 25 years.

Raising the official pension age would have a significant impact on reducing the shortfall. With an average life expectancy of close to 21.5 years (20 for men, 23 for women) from the age of 65 in Switzerland, an average retiree currently spends an estimated 21.5 years collecting a pension. Shaving a year off this would cut outgoings by 4.7% (1/21.5).

Under the slogan of “guaranteed and sustainable old age pensions” the text of the initiative would raise the retirement age by two months a year until it reached 66. The increases would start four years after a successful vote.

In addition, the retirement age would continue to rise in line with any increase in life expectancy. By automating adjustments we would ensure the sustainable financing of state pensions without burdening the population with new taxes, said Patrick Eugster, one of the organisers of the initiative.

Nicolas Jutzet, another of the initiative organisers, explains that as large numbers of employees reach retirement age in the coming years, employers will be faced with a shortage of workers. In this context it should be easier for older workers to remain in the workforce.

Jutzet also believes that pension reform requires a referendum. He thinks that the population is ahead of politicians on the need for changes that he thinks should have happened 20 years ago. Before the government recently decided to harmonise the retirement age, Switzerland was one of the few nations, alongside Poland, to have different retirement ages for men and women, he said.

The Federal Chancellery must now validate the signatures before the vote moves to the next stage.

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Permanent link to this article: https://snbchf.com/2021/07/investec-vote-increase-swiss-retirement-age-clears-signature-hurdle/

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