Voters in Switzerland have rejected a plan to reform the country’s pension system that would have increased taxes and raised the retirement age for women.
The “Pensions 2020” reform package was opposed by 52.7% of voters, while 47.3% voted in favor of the measure. The plan had been developed with the aim of addressing the challenges facing social security retirement and pension provision due to demographic changes and a low interest-rate environment.
The pension overhaul would have raised the retirement age for women to 65 from 64, which would be equal to that of Swiss men. However, it would have increased flexibility of retirement between the ages of 62 and 70, with the earliest retirement age rising from age 58 to 62. Employees would have had the option to work past age 65 to accrue greater retirement benefits. The changes also included lowering the minimum conversion rate under the mandatory employer provision to 6.0% from 6.8%.
Additionally, the implementation of the reforms would have required amending the Swiss constitution, as it also included a proposed increase in the value-added tax (VAT).
Despite the defeat, Interior Minister Alain Berset, who is the head of the Swiss government’s social security and pension issues, said the country’s pension systems had significant problems that still need to be addressed.
“The funding and stabilization of the pension system remains a major challenge for our society,” he told a news conference, according to SWI swissinfo.ch, the international service of the Swiss Broadcasting Corporation.
Switzerland’s left-leaning and centrist parties supported the reform package, while the conservative Swiss People’s Party (SVP), and the pro-business Free Democratic Party (FDP), opposed the proposed changes, arguing that they were not enough to protect the Swiss pension system for future retirees.
ASIP, Switzerland’s occupational pensions association, which backed the reform package, said a “restart” on pension reform is necessary, and that the “no” vote should not be seen as a rejection of fundamental reform of pension provision.
“A reform that solves the most urgent problems is now needed,” said ASIP in a statement.
“The ASIP continues to apply for realistic benchmarks in occupational pension plans, in order to ensure that the employees’ performance promises can also be adhered to.”