Vote to increase Swiss retirement age passes key milestone

The retirement age in Switzerland could increase by a year, after the youth chapter of the PLR (FDP) collected enough signatures to bring the issue to the Federal Chancellery. The changes would see the retirement age increased to 66. 

The government recently passed laws to create a universal retirement age

Though the current law in Switzerland states that the official age of retirement for women is 64, and 65 for men, the government recently passed a law to create a universal retirement age of 65. Organisers of the initiative claim that these reforms were needed a long time ago, and that Switzerland’s gender-differentiated pension system is old-fashioned. 

On July 16, the initiative’s organisers submitted 145.000 signatures as part of the official process of launching a referendum. The signatures must now be validated by the Federal Chancellery before the vote moves to the next stage. The initiative proposes raising the retirement age by two months a year, until the age of 66, incremental increases to start four years after a successful vote.

Switzerland’s pension scheme has been under pressure for many years already

As part of the reforms, the government also increased VAT to eight percent, in order to help cover the cost of pensions in Switzerland. Since the nation has an ageing population, the government expects to see a large pension shortfall of around 200 billion Swiss francs in the next 25 years without reforms. 

Raising the official retirement age can help to decrease the shortfall, however more reforms will likely be needed in order to meet the large ageing population’s demand. As large numbers of workers retire, the workforce will shrink, and thus an older retirement age can help to support the workforce for longer.