The Swiss National Council, the lower house of parliament, has voted in favour of increasping the retirement age for women from 64 to 65 years old, which is one element of a comprehensive reform of the first pillar pension system (AHV).

The Council of States, the upper house of parliament, has already given the green light to up the retirement age for women in March.

A higher retirement age for women would relieve the AHV of around CHF10bn over a period of 10 years, it said.

The parliament has also approved the possibility to withdraw pensions early, from the age of 63, and the increase of VAT in conjunction with a higher retirement age for women.

The reform package still needs agreement on certain points, for example on the compensation measures for women who reach retirement at 65 after the new rules apply.

The National Council decided for compensation measurea reaching a peak of CHF670m in 2028.

The Federal Council proposed a CHF692m compensation package for women in 2031. The Council of States foresees instead a compensation package worth CHF421m in 2031.

A further point of contention is the amount of VAT to finance the AHV. The National Council wants to increase the current rate of 7.7% by 0.4 percentage points, while the Council of States by 0.3.

The Federal Council originally proposed to up the value added tax by a maximum of 0.7 percentage points.

The National Council supports the idea of using the profits of the Swiss National Bank (SNB) from negative interest rates to fund the AHV, while the Council of States has so far rejected it.

The reform of the first pillar targets the financial stability of the AHV until 2030 against an outlook seeing its financial situation deteriorating.

The first pillar pension system has already seen an additional CHF2bn flow every year, from 2020, through the tax reform to finance the AHV (STAF).

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