Swiss vote against plan to save pensions

Swiss voters rejected on Sunday a divisive pension reform plan that the government proposed to address the needs of an ageing population.

Swiss vote against plan to save pensions
Photo: Fabrice Coffrini/AFP

The final results showed 52.7 percent of voters said no to changes to the current system which would have raised women's retirement age by a year to 65 as well as hiking VAT to help fund benefits.

The result of the tight vote is a setback for the government, which said the changes would help avoid deficits in a social security scheme facing pressure from an ageing population, with baby boomers entering retirement.

Rising life expectancy, now 83 years, has added further strain.

But critics argued that the changes were too modest to rescue a retirement system in financial peril.

Only 47 percent of Swiss voters cast ballots in favour of the reform, which was approved by parliament in April.

The Swiss did however vote to put the issue of food security in the constitution, after it was requested by the agricultural industry.

The vote is the latest in Switzerland's direct democracy system, which includes four referenda a year on major national issues.

Irrational voting behaviour?

Backed by leftwing and centrist parties, the reform proposal also includes more retirement age flexibility and increased contributions from employers and workers.

The plan, officially known as Pension Reform 2020, would only have come into force if voters also approved the corresponding VAT increase.

Ahead of the vote, opinion polls suggested the result was too close to call, with the pro-reform side slipping marginally in recent weeks.

Support for the plan stood at 53 percent in mid-August but had fallen to 51 percent days ahead of the vote, while just 50 percent of respondents said they backed the VAT increase.

Rightwing parties campaigning against the move said it does not guarantee the survival of the pension system after 2027 and that beyond that date, future generations will be forced to come up with yet another rescue package.

Because the VAT increase requires a change of Swiss constitutional law, it needed double approval to pass, including majority support among voters and majority support in more than half of the country's 26 cantons.

Marie-Noėlle Blessig

For members


Taxes to work permits: Who deals with what in Switzerland?

Like other countries, Switzerland too is a bureaucracy, where various government agencies oversee different functions of public and private life.

Taxes to work permits: Who deals with what in Switzerland?

Unless you are a hermit and live off the grid, you will, sooner or later (probably sooner), have to deal with administrative processes of one kind or another.

In this respect, Switzerland is no different from any other nation, with the only difference being that because it is small and well-organised, the bureaucratic machine is running smoother here than elsewhere.

On the plus side, because it is fairly efficient, dealing with various public entities is probably less of a hassle in Switzerland than in less tidy administrations.

If you are a foreigner, especially a newly arrived one, you may not yet be familiar with the workings of various government agencies — in other words, who does what.

The first thing to know is that very few tasks that are likely to affect you personally are done at the federal level; most administrative processes are handled by cantons and municipalities.

These are some of the most important services, and who is responsible for providing them:

Pensions: federal and cantonal

The Federal Department of the Interior regulates and supervises obligatory pension plans, while the Federal Social Insurance Office implements the scheme.

Your pension, however, will be paid by your canton’s social insurance office

Work / residence permits: cantons

Permits are delivered by your canton, though the application procedure is different depending on whether you are an EU / EFTA national or a citizen of a third country.

Cantonal authorities are also responsible for renewing / extending expiring permits.

Taxes: cantons

As the cantonal tax office calculates how much taxes you owe in any given year, your declaration must be sent to cantonal authority

They will collect the cantonal, federal, and municipal taxes, distributing the money proportionally among them.

Driver’s license / car registration: canton

Anything related to driving — tests, licenses, vehicle registrations, and inspections — is the responsibility of cantonal automobile services

Health insurance subsidies:canton

If the monthly premiums of your obligatory health insurance (KVG / LaMal) exceed 8 percent of your income, then you may qualify for subsidies (premium reductions) from your  canton of residence.

You can apply for them here

READ ALSO: How do I apply for healthcare benefits in Switzerland?

Social aid: canton and municipality

Welfare assistance comes under the responsibility of your canton, which will consider your application and determine if you are eligible for financial help.

However, you should submit your application for assistance to your municipality, which will then transfer it to the cantonal welfare office.

As you can see, most public services are managed by cantons, so you may be wondering what is the role of your local municipality / commune?

They do their share as well.

For instance, they manage a register of residents, organise and maintain their own fire brigades, civil defence units and police forces (the latter two mostly in bigger communes).

They are also responsible for schools on their territories, as well as local energy supplies, municipal roads and parking, waste management, and infrastructure planning and upkeep, among other tasks.

READ ALSO: What exactly does your Swiss commune do?