Switzerland’s pension reform package, Altersvorsorge/Prévoyance 2020, was rejected in a binding referendum last month. The Swiss voted against changes to the Swiss first and second pension pillar systems, as well as additional financing for the first pillar AHV/AVS.
Rejected by narrow margins The Swiss people had to decide on a complex package of technical adjustments to the pension system, as well as Value Added Tax (VAT) increases, to help finance the first pillar. The two separate questions posed in the referendum were both rejected by the public, albeit only by narrow margins:
• 52.70% said no to the Altersvorsorge 2020 package, which included lowering the conversion rate, and a one-off first pillar pension top-up for all Swiss people.
• 50.05% of the people said no to increasing VAT to help finance the first-pillar AHV fund.
The VAT increase package was simultaneously rejected by a majority of Cantons (states). Following the Swiss federal constitution, this kind of tax increase needs a “double majority” (people and cantons) to be accepted.
New negotiations to begin soon
Swiss social minister Alain Berset said on Swiss TV that he “accepted the result” and would “talk to all stakeholders including those opposed to the reform” to find out what the next steps should be. “A reform is needed and we have to keep on working and find a solution,” he added.
The Swiss pension fund association (ASIP) called for an “immediate start” to fresh negotiations, addressing the most pressing problems: moderate additional financing for the AHV, flexibility of the retirement age, and a lowering of the minimum conversion rate with compensatory measures in the second pillar (BVG/LPP) to preserve the pension level.
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