Swiss aim at reforming pension system

Photo: AP

Swiss voters are to get a fresh chance to decide on reforming their increasingly underfinanced state pension system under a proposal that would raise both men's and women's retirement ages to 66 at first, and to just over 67.5 by 2050, news wires reported.

Ageing populations and ultra-low interest rates are putting pressure on pension systems everywhere, and many countries have already raised retirement ages. Recent attempts to initiate a reform through the Swiss system of direct democracy have failed at the ballot box, according to Reuters.

Now the Young Liberals, youth wing of the business-friendly Liberal Democratic Party (FDP), are having another go. Under the slogan "Revolt of the Young", they submitted 145,000 signatures to authorities in Bern on Friday to force a referendum on a proposal to bring the retirement age to 66 by 2032, from the current 64 for women and 65 for men.

"The reform discussed in parliament doesn't go far enough. It only secures the system for a few years, but the big problem comes afterwards," said Patrick Eugster, president of the initiative committee. "We need a sustainable solution now. If people live longer, they also have to work a bit longer," he added

The proposal would raise the retirement age more slowly from 2032, in line with average life expectancy. The initiative needs validation from parliament, and a referendum would then be expected in around three years. Critics say the reform is unfair to women, whose retirement age would rise faster, and would only benefit the wealthy.

"People with low and medium incomes would be working longer to improve the financing of the pension system so the rich don't have to contribute more," Cedric Wermuth, co-president of the Social-democratic Party (SP), said. Thomas Bauer of the employee organisation TravailSuisse said the move would lead to more older workers being registered as unemployed or disabled.

Switzerland's pension system rests on two mandatory pillars, the Old Age and Survivors' Insurance (AHV) and the occupational benefits insurance (BVG) or "pension fund", and a third, voluntary pillar for private savings. Since 2014, the AHV has been paying out more than it takes in, with the problem bound to intensify as the baby-boomer generation retires.

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