Swiss to vote on occupational pension reform and biodiversity

A complex proposal to reform Switzerland's occupational pension scheme is going to a vote on September 22. Keystone / Alexandra Wey

On Sunday, the Swiss will vote on reform of the occupational pension scheme and on a biodiversity initiative. Neither proposal is likely to be accepted at the ballot box, according to the latest polls.

For the second time this year, pensions are taking centre stage in a federal vote. In March, voters approved a 13th monthly pension payment under the Swiss Old-Age and Survivors’ Insurance (OASI) scheme. The OASI is known as the “first pillar” of the Swiss retirement system. Sunday’s vote concerns the “second pillar” of the system: occupational pensions.

Occupational pensions combine mandatory salary deductions with employer contributions. These are paid into individual pension accounts at a pension fund. When a person retires, the fund then disburses an annual pension.

Switzerland has more than 1,000 different pension funds. Their rules typically vary but must conform to certain parameters required by federal law. The reform proposes some changes to these basic legal requirements. It was drawn up by the federal government and parliament and is supported by the right-wing parties and the centre-right party The Centre.

The main change is a reduction of the so-called “conversion rate”. This rate is the fixed percentage of a pension account that is paid out to its owner annually after retirement. The retiree receives this pension for the rest of his or her life. The reform would reduce the conversion rate from 6.8% to 6%. So a retiree with pension savings of CHF100,000 ($118,000) would receive an annual payment of only CHF6,000 instead of CHF6,800.

The reform’s central goal is to assure sustainable funding of the second pillar. The authorities worry that the stability of pension funds is being negatively affected by increasing life expectancy and low interest rates. They also hope to improve coverage for people with modest incomes who don’t currently qualify for an occupational pension – the majority of whom are women. Access to the pension scheme depends on a minimum annual salary, which the reform lowers from CHF22,050 ($26,000) to CHF19,845 ($23,400).

The left-wing parties and the unions, which oppose the reform, launched a referendum calling for a popular vote. This coalition has focused its campaign on one principal argument: working people will have to contribute more to their pension funds, but when they retire they will receive lower pensions.

This argument appears to have succeeded: support for the pensions reform has continued to decline. According to the latest Swiss Broadcasting Corporation (SBC) poll taken two weeks before the vote, 51% of the electorate plans to vote “no”.

Biodiversity initiative likely to fail

The arguments in favour of the biodiversity initiative do not appear to have won out.

The most recent SBC poll showed 51% of voters against it. The Swiss Abroad were 56% in favour, but this will not change the likely result of the vote.

The initiative was submitted in September 2020 by nature and environmental organisations. They hope to ensure enough funding and land area to promote biodiversity. They also want greater constitutional protections for landscapes and historic buildings and sites.

The left-wing parties and the centrist Liberal Green Party support the initiative. They feel that Switzerland’s biological diversity is unsatisfactory and that existing measures to preserve it are inadequate. According to the Federal Office for the Environment (FOEN), half of the country’s ecosystems and a third of its species are threatened.

A broad alliance – uniting the main right-wing parties, The Centre, the agricultural sector, and economic organisations – is fighting the initiative. This opposition considers the proposal “extreme and inefficient” and believes existing legislation is sufficient to promote biodiversity.

The campaign has created a rural-urban divide. Some farmers are angry because they believe they already do enough to preserve nature. The agricultural community also worries that the proposal will severely curtail food production. Polls have shown that urban voters, in contrast, are in favour of the initiative. The tension has not, however, been as pronounced as in 2021’s very heated campaign over two anti-pesticide initiatives.

Edited by Samuel Jaberg

Adapted from French by K. Bidwell/gw