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Commission wants to postpone pension hike funding question

Summary:
After the successful vote to raise Swiss state pensions by one twelfth (a 13th month payment), the question of how to fund the extra CHF 4.2 billion a year required has been preoccupying many in Bern. This week, a parliamentary commission voted 13 versus 12 to postpone the question and to tackle it later during planned discussions aimed at reforming the pension system more generally, reported SRF. © Hai Huy Ton That | Dreamstime.comMany behind the vote argued a 13th month pension payment could easily be funded. However, those trying to balance the books in Bern are scratching their heads. Switzerland’s federal budget is in the red and forecast to stay there for several years without new spending cuts or tax increases. In addition, despite current receipts exceeding outgoings,

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After the successful vote to raise Swiss state pensions by one twelfth (a 13th month payment), the question of how to fund the extra CHF 4.2 billion a year required has been preoccupying many in Bern. This week, a parliamentary commission voted 13 versus 12 to postpone the question and to tackle it later during planned discussions aimed at reforming the pension system more generally, reported SRF.

Commission wants to postpone pension hike funding question
© Hai Huy Ton That | Dreamstime.com

Many behind the vote argued a 13th month pension payment could easily be funded. However, those trying to balance the books in Bern are scratching their heads. Switzerland’s federal budget is in the red and forecast to stay there for several years without new spending cuts or tax increases. In addition, despite current receipts exceeding outgoings, Switzerland’s state pension fund is set to run aground financially without reform. Population ageing is highly predictable and will bring an almost inevitable funding challenge, something the Federal Council has long made clear. The mathematics behind it is simple: by 2050 there will be 2.2 workers per pensioner compared to 3.2 in 2020. Essentially, with no changes pension funding will fall by more than 30% relative to outgoings from where it is today.

Switzerland’s Socialist Party criticised the commission decision this week. In a post on X/Twitter it suggested the move could be part of a plan to use the funding question to negotiate a higher retirement age, something the party dislikes.

In addition, the commission supported including disability benefits within the scope of the extra 13th month payment arguing the two forms of social welfare should be treated in the same way as they have been to date.

More on this:
SRF article (in German) 

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