ANALYSIS: Why Switzerland can’t avoid increasing retirement age?
One of the two pension-related issues on the ballot in a national referendum on March 3rd is the proposal to raise the retirement age in Switzerland.
This initiative, spearheaded by the liberal-radical party (PLR), calls for raising the retirement age for men and women to 66, from the current 65 for men and 64 for women (the latter to go up to 65 from 2025).
Further, the retirement age will be tied to the average life expectancy — that is, it would be automatically raised if Swiss life expectancy ( which is already among the highest in the world) increases.
Specifically, the initiative calls for the retirement age to increase from 65 to 66 years by 2033, and then be automatically linked to life expectancy.
The Federal Council and parliament recommend rejecting this measure because basing retirement age on population’s longevity doesn’t take into account social issues or the situation on the labour market.
A poll carried out by Switzerland’s largest media group, Tamedia, shows that most voters will follow the government’s recommendations: only about 35 percent are in favour of this proposal.
However, regardless of how this initiative plays out at the polls on March 3rd, experts say that, sooner rather than later, Switzerland’s retirement age will have to be raised.
‘Financial consequences’
The reason for launching this proposal is that, with the current retirement age of 65, “we are heading straight towards a demographic tidal wave with gigantic financial consequences,” according to Matthias Müller, president of the PLR’s youth section.
Experts agree with this assessment.
“We can’t avoid increasing retirement age,” said demographer Hendrik Budliger.
The reason for this forecast is Switzerland's current ‘age structure’ — low birth rate which doesn't compensate for longer life spans.
This means that there are not enough young people and too many old ones — which poses challenges because there won’t be enough new workers to fill the gaps in the labour market and also to generate income for future pension funds.
Budliger also pointed out that in many other countries the retirement age is already higher than in Switzerland.
At what age do people retire elsewhere?
Statuary retirement ages vary across. Europe.
In neighbour countries, they are as follows:
- France: 62, to be raised to 64 by 2030
- Germany: 65 years 7 months, gradually to be raised to 67 (already in effect for those born after 1964)
- Austria: 65 for men, 60 for women, gradually being raised to 65 for the latter
- Italy: From 2023, it is 67, but only if you've paid into the system for at least 20 years
Other countries are also increasing retirement age tresholds — or planning to do so.
In the UK, for instance, the current age is 66 for both men and women, but will start gradually increasing from May 2026.
In the United States, the retirement age is staggered: 66 for those born from 1943 to 1954.
The full retirement age increases gradually for people born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.
READ ALSO: What's at stake in Switzerland's March 3rd referendum?
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This initiative, spearheaded by the liberal-radical party (PLR), calls for raising the retirement age for men and women to 66, from the current 65 for men and 64 for women (the latter to go up to 65 from 2025).
Further, the retirement age will be tied to the average life expectancy — that is, it would be automatically raised if Swiss life expectancy ( which is already among the highest in the world) increases.
Specifically, the initiative calls for the retirement age to increase from 65 to 66 years by 2033, and then be automatically linked to life expectancy.
The Federal Council and parliament recommend rejecting this measure because basing retirement age on population’s longevity doesn’t take into account social issues or the situation on the labour market.
A poll carried out by Switzerland’s largest media group, Tamedia, shows that most voters will follow the government’s recommendations: only about 35 percent are in favour of this proposal.
However, regardless of how this initiative plays out at the polls on March 3rd, experts say that, sooner rather than later, Switzerland’s retirement age will have to be raised.
‘Financial consequences’
The reason for launching this proposal is that, with the current retirement age of 65, “we are heading straight towards a demographic tidal wave with gigantic financial consequences,” according to Matthias Müller, president of the PLR’s youth section.
Experts agree with this assessment.
“We can’t avoid increasing retirement age,” said demographer Hendrik Budliger.
The reason for this forecast is Switzerland's current ‘age structure’ — low birth rate which doesn't compensate for longer life spans.
This means that there are not enough young people and too many old ones — which poses challenges because there won’t be enough new workers to fill the gaps in the labour market and also to generate income for future pension funds.
Budliger also pointed out that in many other countries the retirement age is already higher than in Switzerland.
At what age do people retire elsewhere?
Statuary retirement ages vary across. Europe.
In neighbour countries, they are as follows:
- France: 62, to be raised to 64 by 2030
- Germany: 65 years 7 months, gradually to be raised to 67 (already in effect for those born after 1964)
- Austria: 65 for men, 60 for women, gradually being raised to 65 for the latter
- Italy: From 2023, it is 67, but only if you've paid into the system for at least 20 years
Other countries are also increasing retirement age tresholds — or planning to do so.
In the UK, for instance, the current age is 66 for both men and women, but will start gradually increasing from May 2026.
In the United States, the retirement age is staggered: 66 for those born from 1943 to 1954.
The full retirement age increases gradually for people born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.
READ ALSO: What's at stake in Switzerland's March 3rd referendum?
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