The reform of the second-pillar pension system in Switzerland is now “more important than ever”, according to the employers association Schweizer Arbeitgeberverband, after the public voted in favour of the 13th month of pension, rejecting at the same time an increase in retirement age, in two referendums held yesterday.

Swiss people will vote in a further referendum on the occupational pension (BVG) reform in the second half of the year.

“The arguments to accept [the reform in the upcoming referendum] are powerful, because the proposal, which was prepared by Parliament over the course of two years, creates greater equality between generations, and closes pension gaps for many part-time workers, especially women,” the association said in a statement commenting on the vote.

The majority of Swiss people (58.24%) voted on 3 March in favour of the paying out, from 2026, of a 13th month of pension from the first-pillar pension system – 13. AHV-Rente.

The proposal was supported by unions as well as political parties – the Greens and the Social Democratic Party (SP) – to increase pensions by CHF2,450 (€2,500) for individuals to CHF31,850 per year, and by CHF3,675 to CHF47,775 per year for married couples.

The results came out in favour of the 13. AHV Rente proposal, following an intense and engaging debate, with 2.5 million people looking to receive, from 2026, a further monthly pension payout, said home affairs minister Élisabeth Baume-Schneider.

She added that the result of the vote shows the people’s trust in the first-pillar AHV that for many is their main source of income.

The employers’ association, however, regrets the decision, it said, adding that an additional pension payment for everyone will place a further burden on the working population – especially young people, families and households with already low wages – without providing significant support to pensioners in need.

One of the looming questions relates to funding the additional month of pension. The Swiss Federation of Trade Unions, SGB USS, expected the 13th month pension to be paid out to pensioners as quickly as possible, it said in a statement.

The additional pension payout will likely cost around CHF4.1bn when introduced, with the government in charge of paying approximately CHF800m of the sum, it said.

Baume-Schneider said it was “too soon” to say how the CHF800m from the public budget will be financed. The Federal Council will take the vote into account when it submits a proposal to Parliament on the mechanisms to stabilise the AHV in the 2030s, she added.

The first-pillar pension system expects to record a deficit after 2030, even without the 13. AHV-Rente. This means that it will need additional income or it would have to reduce benefits, according to the government.

The options on the table to finance larger first-pillar expenses include increasing contributions from employers and employees’ wages, or a higher VAT rate.

A third option – increasing retirement age – was rejected in a separate referendum yesterday. A large majority (74.72%) voted against increasing the retirement age to 66 years old, for both men and women.

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