Working after retirement age touted as solution to Swiss labour crisis

As Switzerland continues to grapple with a record shortage of workers, FDP. The Liberals have argued that getting older people to continue working beyond the retirement age is a key part of the solution. In comments given to the Swiss media, officials within the party have demanded that employees be better compensated for working longer.

Switzerland to face 500.000 worker shortage by 2033

Writing in the Zuger Zeitung, FDP Councillor of State Damian Müller confirmed that he had submitted a proposal to the Federal Council, calling for employees who work beyond the official retirement age to be better compensated for doing so. The party itself said that it believed that encouraging retirees to work longer is a way to ease the continuing shortage of workers in Switzerland. 

According to the Neue Zürcher Zeitung, over the next 10 years, 500.000 more people will retire and start claiming a Swiss pension than join the workforce. Therefore, by providing incentives for people to work beyond retirement, the FDP argues that it will give the country more time to address the shortage.

FDP argues AHV allowance penalises older workers

Specifically, Müller’s proposal calls for the so-called "AHV allowance" to be increased. For context, anyone over the age of retirement who has a salary or earnings over 16.800 francs a year still has to contribute towards pensions and social security programmes but does not gain increased benefits as a result. These are known by the government as “solidarity contributions.”

In the motion, Müller demanded that the allowance “should now be increased from 16.800 francs per year to 36.000 francs.” He argued that under the current system, “pensioners who voluntarily work beyond the normal retirement age are penalised and fleeced” by having to pay into a system that they fail to benefit from.

Swiss government argues solidarity payments are integral to the pension system

"The retirement of the 'baby boomer generation' is creating a gap in the labour market that absolutely requires structural measures", Müller argued. “In the future, it will be worthwhile for pensioners and their employers to help the economy out of trouble when it comes to labour shortages – voluntarily, of course.”

In a statement, the Federal Council said it did not agree with the plan, arguing that the current system already encourages people to work and that the solidarity contributions made by retirees are integral to maintaining the pension system. They added that it was the wrong time to introduce the measure, given the recent upheaval related to the latest pension reforms. The idea has now been sent back and will be debated within parliamentary commissions over the coming weeks.