Following more than two years of discussions the package, which aims to secure funding for old age pensions, was finally passed by both houses of parliament this week, reported news agencies.

 

The set of reforms would see the retirement age for women raised to 65 – it is currently 64 – bringing it in line with men.

 

Second pillar – or occupational – pension payments will decrease from 6.8 percent of the capital per year to 6 percent, although salary deductions will go up slightly.

 

That will be compensated with a monthly 70 franc bonus in AVS/AHV (state pension) payments, from 2019.

 

The reforms will be financed by a 0.6 percent increase in VAT – currently eight percent – a change to the constitution that will be put to the people concurrently in September. 

 

Though eventually passed by parliament, the reforms have divided Swiss political parties, with the Swiss People’s Party (SVP) and Liberal-Radicals opposing the package. The political right say the reforms will threaten rather than improve the situation of old-age pensioners.

 

The people will ultimately decide in September.

 

Last year voters rejected a plan to increase pension payments by ten percent, an idea the Swiss government opposed, saying it was too expensive to fund.

 

In 2014 a study found Switzerland to have one of the best pension systems in the world. 

 

Its three-pillar structure includes state, professional and private contributions.