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PENSIONS

What is Switzerland’s 13th-month pension plan and why are they voting on it?

A recent poll has shown that the overwhelming majority of Switzerland’s population wants the government to introduce the 13th- month pension plan. What is it and how would retirees benefit from it?

Published: 27 July 2023 11:52 CEST
What is Switzerland's 13th-month pension plan and why are they voting on it?
Many retirees would benefit from the 13th pension, referendum committee says. Photo: Pixabay

Nearly 70 percent of Switzerland’s population are in favour of extending the first-pillar state pension over 13 months, according to a survey carried out by Tamedia media group. 

The proposal, brought about by left-wing parties and trade unions, seeks to base the first-pillar  pension (AHV in German and AVS in French and Italian) on the the 13-month salary system practiced by most Swiss employers.

This means that annual earnings are calculated on, and paid out in, 13 instalments rather than 12.

The idea behind this system is that the 13th instalment paid out in December (in effect, two months’ salary) will help pay for Christmas expenses and other end-of-year bills.

READ ALSO : What is the 13th-month salary in Switzerland and how is it calculated?

Spreading the AHV / AVS  benefits over 13 months would increase first-pillar pensions by 8.33 percent, supporters say.

‘Not sustainable’

The push toward the 13th pension is not new; it  has been debated by MPs  for a while.

Earlier this year, both chambers of the parliament voted against the proposal, claiming that an increase in the first-pillar pension would not be financially sustainable in the long term. The additional expenditure would reach 5 billion francs by 2032, MPs said.

In response, supporters of the new system collected over 137,000 signatures —37,000 more than required by law —  to bring this issue to a national vote.

This move is necessary to compensate financially-strapped retirees for the higher cost of living, Social Democratic Party, which spearheaded the campaign, explained on its website.

“Rents and health premiums are rising, and pensions no longer cover essential expenses,” the party said. 

The additional 8.33 percent that would be generated by the 13th payout, would  benefit those who need it most: low and middle income retirees, supporters point out.

More pension woes

They also argue that the hike is even more necessary now, as second-pillar occupational pensions are at risk of decreasing by about .08 percent.

That’s because Switzerland’s rising life expectancy — one of the highest in the world — is weakening the pension system, with the government saying the only way to protect the second-pillar scheme is to reduce payouts.

READ ALSO: Will you be able to live comfortably on your Swiss pension?

This issue will be decided on at the ballot box on March 3rd as well, when both pension-related reforms will be voted on.
 

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REFERENDUMS IN SWITZERLAND

What’s at stake in Switzerland’s ‘physical integrity’ referendum?

On June 9th, Swiss voters will decide on whether the country’s residents should have the right to refuse procedures that would impact their ‘physical integrity.’ What exactly does this mean?

Published: 6 May 2024 16:04 CEST
What's at stake in Switzerland's 'physical integrity' referendum?

Four issues in total will be brought to the ballot box on June 9th.

Among the most controversial topics are the two initiatives seeking to curb the cost of the obligatory health insurance — one by capping the premiums at 10 percent of income, and the other by  providing a ‘brake’ on health costs, which should evolve according to the economy and wages.

READ ALSO: How Switzerland’s two crucial health insurance referendums could impact you 

But there are two other proposals on the agenda as well.

One, titled “For the freedom of physical integrity” was launched by the STOP compulsory vaccination committee of a group called Swiss Freedom Movement.

While it may seem a bit outdated today, this citizen-driven initiative saw the light of day during the Covid pandemic, when the Federal Council had to take some drastic measures — including quarantine and confinement —  to protect the population from the virus and prevent the healthcare system, especially hospitals, from being saturated.

This, along with the vaccines introduced at the end of 2020, prompted the group to start colecting enough signatures to challenge these measures in a referendum.

What exactly is it about?

The initiative demands “protection of the body” against interference by the state.

It specifies that the consent of the person concerned must be obtained for invasive procedures that may affect their “physical or mental integrity”, which basically means any medical interventions, like vaccinations, but in practice it goes much further (read more about this below).

The federal government, cantonal health authorities, and health experts in general, recommend that voters reject this proposal, for several reasons.

One is that physical and mental integrity are already protected under the Constitution, which guarantees the right to ‘self-determination’ in matters of health and life in general.

As for vaccinations, whether against the coronavirus or any other diseases, nobody can be forced to be immunised against their will in Switzerland.

Another argument against the initiative is that, if it is passes, it would hinder measures that the government would have to implement to protect the population in case of another pandemic.

But there would be non-medical consequences as well

Since the initiative doesn’t specifically refer to medical interventions but covers generally any actions by the federal government, cantons and communes that involve physical contact, it implies that police would no longer be able to arrest a suspect without his or her authorisation — as such actions would involve physical contact that could impact a person’s mental state.

According to the government, the initiative focuses on individual rights and ignores the overriding public interest.

The initiative therefore goes well beyond vaccination and other health matters, it said.

The fourth issue: electricity supply

Supplying Switzerland with sufficient energy has become a challenge due to International conflicts and the restructuring of the European power grid.

Therefore, a new law sets the ground for Switzerland to rapidly produce more electricity from renewable energy sources such as water, sun, wind, and biomass. 

Opponents, however, say that the legislation will be detrimental to environmental causes like the protection of nature, and urge the ‘no’ vote.

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