As expected, this week, Switzerland’s left leaning political parties and unions announced the launch of a vote to strike down the work related pension reform plan accepted by the government last week, reported RTS.
The government plan, which reflects the challenging mathematics of funding pensions at their current level in the face of an ageing population, essentially requires most workers to pay more and receive less. It also forces some that currently escape pension salary deductions to pay them, something that creates short term pain for longer term gain, in the form of a higher work-related pension.
Another pension challenge the government is trying to head off is rising life expectancy. Life expectancy at 65, Switzerland’s state pension age, was 19.9 years for men and 22.7 for women in 2021. This means an average man would spend 31% of their adult life (after 20) in retirement. The same percentage for an average woman is 34%. If recent trends continue these percentages will rise.
Given that inevitable personal financial cost of the changes, the government expected its plan to be challenged in a vote.
The main complaint put forward by the organisers of the vote is that it will require workers to work more for lower pensions. They also argue that recent interest rate rises could allow for higher pension annuity rates going forward – the plan cuts the annuity rate from 6.8% to 6.0%.
The organisers have until 6 July 2023 to raise the required 50,000 signatures required to launch a referendum aimed at undoing governmental decisions.