Various Swiss unions along with the socialist and green parties have launched an initiative to increase pensions. Their plan, which demands a 10% increase in pension payments, will be put before Swiss voters in a referendum on 25 September 2016.
The cost of the plan could be as high as CHF 4.1 billion. Those behind the vote propose increasing social security taxes by 0.8% to fund the rise. Pension increases would equate to an extra CHF 2,400 a year for someone living alone and CHF 4,200 for a couple.
The Swiss government rejects the plan on the grounds that it competes with existing plans to reform Swiss pensions.
As Switzerland’s population ages, the pension funding gap will grow as the number of workers paying into the system declines relative to the number of pensioners. To deal with this problem, the government has developed a plan called « Old age pension 2020 ». The main elements of this plan are to increase in the retirement age of women to 65, in line with men, reduce pension payments, and increase VAT by up to 1.5% to fund the gap between inflows and outflows.