The Swiss government has admitted that it overestimated how much it would cost to fund the pension system by a magnitude of billions of francs. While first-pillar pensions in Switzerland were found to be more financially healthy than first thought, many in parliament have said the error has called the validity of pension-related referendums into question.
On August 8, the Federal Social Insurance Office admitted that it had made a mistake when calculating how much first-pillar pensions (AHV / OASI) would cost in the future. They said that because of an "incorrect formula", the expected cost of AHV was “implausibly high in the long term."
Spending on pensions is now predicted to be four billion francs (6 percent) less than expected between now and 2033. While AHV funds are still expected to run a 4-billion franc annual deficit by 2033, the shortfall will be over 3 billion francs less than predicted.
Interior Minister Elisabeth Baume-Schneider has ordered a full investigation into the error, which will be carried out by an external law firm. Their findings should be made available by the end of the year.
While the announcement is good news for the government and pension funds, the technical error has led some to question the validity of past and prospective Swiss referendums. In a statement given to SRF, the Social Democratic Party (SP) wrote that thanks to the new figures, plans to increase the retirement age or cut benefits are now “definitely off the table.”
The incident has also raised concerns about how effective the federal government is at predicting the impact of its policies and proposals. In 2017 for instance, a Federal Audit Office report found that among 50 draft laws being debated by parliament at the time, federal authorities had failed to explain in detail what impact a third of the proposals would have on people, cantons, companies and the environment.
SP Women, the Green Party, The Left and the Swiss Federation of Trade Unions (SGB) have gone one step further, demanding that the vote to raise the retirement age for women in Switzerland (AHV21) be repeated in light of the updated forecast. SP Women argued that the poor financial health of pension schemes was one of the main reasons for the proposal being approved, meaning Swiss citizens had voted based on false information.
"The federal government's incorrect estimates call this vote into question," argued the SGB in a statement - the 2022 vote was only passed with 50,5 percent of the vote. "Women in Switzerland have been cheated out of a year of pension," a letter from the Green Party added.
For their part, FDP. The Liberals called the error a “fiasco”, blaming Baume-Schnieder for the incident and adding that it undermined trust in federal institutions. However, both they and the Swiss People’s Party have rejected calls to re-run the vote on AHV21.
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