A proposal that will see Switzerland’s first pillar pension fund receive an additional CHF2bn (€1.8bn) in annual contributions was passed in a referendum yesterday.
The funding plan for AHV/AVS pensions, which was linked to a proposal for corporate tax reform, was supported by around two-thirds of the voting public, according to media reports.
The outcome means increased contributions to the first pillar pension plan for employers, employees and the federal government. The extra CHF2bn are due from 2020.
Switzerland’s federal social security office has calculated that the AHV/AVS fund will run out of assets by the end of 2030 if no measures to address the funding imbalance are adopted before then.
Compenswiss, the CHF34.3bn (€30bn) manager of the AHV/AVS and other statutory social security plans, has been selling assets to address its cashflow problem. Last month it said the first pillar pension plan lost CHF2.2bn in 2018, CHF1bn of which was down to a cashflow shortfall and CHF1.2bn down to investment results.
The Swiss employers’ association, UPS, said the result of yesterday’s referendum “does not change the fact that the cabinet and parliament must get down to a genuine reform of the AHV without wasting time”.
“Precious time” to put the first pillar on a sustainable footing had been lost with Sunday’s vote, the association added.
SGB, Switzerland’s trade union confederation, meanwhile, said the Yes vote “created room and time for reform of the state pension plan in the interest of the entire population,” and that the emphasis needed to be on contributions.
It reiterated its opposition to an increase of the general pension age and the pension age for women.
The trade union has argued that consequences of the baby boom for the pension system are a temporary phenomenon that can be handled with additional financing. It is calling for state pensions to be expanded with the addition of an extra month’s pension.