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PENSIONS

Switzerland rapped for being ‘sexist’ towards men over pensions

The European Court of Human Rights (ECHR) on Tuesday rapped Switzerland for stopping a widower's pension, saying it amounted to sexism.

Switzerland rapped for being 'sexist' towards men over pensions
The inside of the European Court of Human Rights (ECHR) in Strasbourg. Photo by FREDERICK FLORIN / AFP

The case concerns Max Beeler, who lost his wife in an accident in 1994 and quit his job to raise his two children, aged one and four.
He received the pension until his youngest child reached 18 years but then it was stopped.

Under Swiss law, if he were a widow, he would have continued to receive a pension for life.

Beeler brought the case before the ECHR.

“At that time, he was 57 years old and had not been in gainful employment for over 16 years,” an ECHR press release said, referring to the time when the payments stopped.

After Switzerland’s Federal Court dismissed the case, the man took it to the ECHR, which ruled that Beeler “had been subjected to unequal treatment that put widowers at a disadvantage in relation to widows”.

“He was not yet eligible for an old-age pension … The applicant had stopped receiving the widower’s pension simply because he was a man,” it said.

“The unequal treatment to which the applicant had been subjected could not be said to have been reasonably and objectively justified,” it added.

The Court also found that Swiss legislation in this matter “contributed to perpetuating prejudices and stereotypes”.

It ordered Switzerland to pay Beeler 5,000 euros in damages and 16,500 euros for expenses.

While this was the first case of this nature brought to the ECHR by a Swiss citizen, the Court handled 249 applications concerning Switzerland in 2021, of which 242 were declared inadmissible or struck out.

Among the cases that were ruled in applicants’ favour in 2021 was one that faulted Switzerland for imposing a heavy fine on a Romanian woman for begging and then detaining her when she couldn’t pay.

READ MORE: Switzerland condemned by rights court over fine for beggar

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For members

RETIREMENT

What is Switzerland’s retirement age – and will it rise?

Questions relating to pensions and retirement have been frequently debated in Switzerland in the past years, both among the population and at the legislative level.

What is Switzerland's retirement age - and will it rise?

Retirement is a hot-button topic for everyone who works in Switzerland.

It is all the more relevant, since the ‘Worry Barometer’ — an annual survey of concerns that preoccupy Switzerland’s population the most in any given year — consistently shows that pensions, and having enough money for retirement, are among the top worries.

And there is a good reason for that: as more people live longer (especially in Switzerland, which has one of the world’s highest life expectancies), continuing to fund first-pillar state pensions (AHV in German and AVS in French and Italian) is a major challenge. 

The government is tackling this problem in various ways.

One is increasing the VAT rates.

From January 1st, 2024, these rates will increase as follows:

  • The standard VAT rate will rise from 7.7 percent to 8.1 percent
  • The reduced VAT from 2.5 percent to 2.6 percent
  • The special rate for hotel accommodation goes from 3.7 percent to 3.8 percent

Another way to ensure that the current level of benefits is maintained is increasing the retirement age for women.

Right now, men in Switzerland retire at 65, while since 1997 women stop working at 64. Prior to that year, they retired even earlier, at 62 — no wonder the AHV / AVS scheme has been running a deficit since 2014.

However, starting in 2025 and until 2028, Switzerland will gradually implement the same retirement age for women as for men — 65 — a move that is expected to boost coffers of the old-age pension scheme.

Both VAT and higher retirement age, by the way were approved by Swiss voters in referendums.

READ MORE: OPINION: Switzerland can no longer justify a lower retirement age for women

Today, women work until 64 but that is about to change. Photo: Vlada Karpovich on Pexels
 

However, the new retirement age is not written in stone: the government is open to upping it to 70 in certain cases

The Federal Council has accepted a motion from MP Ruth Humbel, who proposed to set the retirement age based on the duration of each individual’s professional activity.

The current calculations for a monthly AHV / AVS pension are based on a person working full time, and contributing to the scheme for 44 years — that is, from age 21 to 65.

This means that people who started working later would not receive full pension.

However, Humbel’s proposal postulates that if someone started their professional career later— say at 26 — they would continue to work until 70, and receive the full first-pillar pension, which is currently 2,450 francs a month, but set to go up to 2,464 francs in July when it is adjusted for inflation.

The lowest AHV / AVS pension, on the other hand, is currently 1,225 a month, to increase to 1,232 in July.

Keep in mind, however, that these are the current amounts of the first-pillar pensions (Switzerland has a total of three, see the link below). As they are typically adjusted for inflation once a year, the amount could be different when you retire.

READ MORE: EXPLAINED: How does the Swiss pension system work – and how much will I receive?

Pensions are adjusted for inflation. Photo: Claudio Schwarz on Unsplash

What else should you know about retiring in Switzerland?

For many people, being able to afford life in Switzerland once they no longer work is a huge concern.

If you receive all three pillars mentioned above, then you probably can live comfortably after retirement.

It also helps if you have savings to fall back on.

A UBS study carried out in 2021 showed that while still working, a person over the age of 50 in Switzerland must set aside 14 percent of their income for retirement. (These days, given the current inflation level of nearly 3 percent, this amount is likely higher). 

This means that if, for instance, you earn 100,000 franc a year, 14,000 francs should be saved for 15 years, which in the end will give you a nice nest egg of 210,000 francs.

Of course, these figures should be adjusted down or upwards, depending on your income.

READ MORE: How much should you save for a ‘comfortable’ retirement in Switzerland?

This is actually quite good because the same UBS analysis found that “in some countries, much higher private savings rates than in Switzerland are necessary to maintain living standards in retirement”.

As an example, Italians must put aside 28 percent of their money for their retirement, Germans 30 percent, and the French 44.

In the United States, people must save 42 percent of their income to live comfortably after they retire.

Of the 24 surveyed countries, pensioners in Nigeria (145 percent), Russia (108 percent) and Japan (102 percent) fare the worst.

These articles will provide more information about retiring in Switzerland:

EXPLAINED: Everything you need to know about retiring in Switzerland

Reader question: Can I take my pension money with me when I leave Switzerland?

EXPLAINED: How to get a visa to retire in Switzerland

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