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Referendums For Members

What impact could Switzerland's referendum on pensions have on you?

Helena Bachmann in Geneva
Helena Bachmann in Geneva - [email protected]
What impact could Switzerland's referendum on pensions have on you?
Seniors in Switzerland could be impacted by the upcoming referendum results. Photo: Pixabay.

Swiss voters will head to the polls on September 25th to decide on three issues, including one that could affect current and future retirees.

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In the third round of national referendums in 2022, voters will weigh in on three issues, including industrial farming and withholding tax.

Foremost among them, however, is the one seeking to reform the OASI scheme.

What is at stake?

OASI is a term for the old age and survivors’ insurance which, according to the government, “is the cornerstone of the Swiss social insurance system. It grants pensions of two basic types: old age pensions to people of retirement age [AHV / AVS], and so-called survivors’ pensions to spouses or dependent children of a deceased insured person”.

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This reform proposed by the government would provide for a higher value added tax (VAT) — currently at 7.7 percent —  to finance the scheme.

If passed, the new legislation would also amend the existing law on AHV / AVS, particularly in relation to increasing the retirement age for women from the current 64 to 65, same as for men. This move too is seen as necessary to keep the AHV / AVS scheme afloat financially as life expectancy in Switzerland is increasing and people require pension benefits longer than in the past.

Should you be concerned by the outcome of this vote?

If you plan to stay in Switzerland once you stop working, then yes.

As the Federal Council explains it, “the reform to is intended to guarantee OASI pensions for the next ten years or so».

In fact, this issue is important to anyone working and planning to retire in Switzerland, as without a new influx of funds, the Swiss pension system could plunge into the red within a few years, “because baby boomers are reaching retirement age and life expectancy is rising”, the Federal Council says.

Who opposes the proposal?

While the government recommends that voters accept this reform, trade unions and political left are against it, arguing that the new system, especially the higher retirement age, would be “detrimental to women” and low-income people.

“It is a real slap in the face inflicted by the insurance lobby and its friends in parliament”, according to Switzerland’s largest labour union, UNIA.

 

As for the Green Party, it argues that an “increase in the retirement age for women would only be the start. If the reform passes, it’ll leave open door to retirement at age 67 for everyone”.
The government has no such plans, however.

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Will this referendum be accepted or rejected?

While nobody knows for sure, based on the latest polls conducted on September 7th, it looks like the voters will probably back the government.

According to the most recent poll carried out by the Tamedia media group, both the increase of the TVA and overall OASI reform (two separate issues within the same referendum) win win a narrow majority of votes, with 55 and 56 percent, respectively.

READ MORE: OPINION: Switzerland can no longer justify a lower retirement age for women

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