Pensions 2020 is a reform in name only

Our pensions system is in financial trouble, but the reform of the old-age and disability pension and the professional pension – the subject of a referendum on September 24 – is not an appropriate way of securing pensions for the next decades. That’s the opinion of parliamentarian Petra Gössi, president of the centre-right Radical Party, which rejects Pensions 2020.

The original primary goal of the reform was to maintain the level of support offered by our pensions system. With support from the government, parliament reformulated this goal and – with a wafer-thin majority – pushed through a reform that expands old age pensions instead of restructuring it. Pensions 2020 has degenerated into an unfair, superficial reform that makes a mockery of the inter-generational contract.

Parliamentarian Petra Gössi has been president of the centre-right Radical Party since 2016. Born in Lucerne in 1976, the lawyer works for a business and tax consulting firm. Keystone

The reform of the old age and disability pension is unfair, because it leads two a two-tier system. While new pensioners will get CHF70 ($73) more, those who are already receiving retirement benefits will have to pay increases in value-added taxes and will mostly have to get by on a lower occupational pension. The mandatory occupational benefits were only introduced in 1985, so many pensioners have only had time to save a small amount of capital, unlike those in the transitional generation – the 45- to 65-year-olds. At the same time, the transitional generation is protected from the lower conversion rates and receives an additional CHF70 in old age pension. This cannot be justified to today’s pensioners; they are picking up the tab for the unjust old age reform and will become second-class pensioners.

I am deeply convinced that everyone should be able to spend their retirement wherever they want, and would deny no one his well-earned pension! Expatriate Swiss are important ambassadors for our country and have made a great contribution to Switzerland’s prosperity. But I do criticise the problems caused by the additional CHF70 in pension. This means that future pensioners in Switzerland who receive extra payments will be disadvantaged, because this increase has to be taxed.

Anyone who believes that this so-called reform will raise the lowest pensions is mistaken. All new pensioners will profit from the old age pension increase. In contrast, those who draw low pensions will have their supplementary payments cut by the same amount. In the worst case, they could also lose their premium discounts and their exemption from paying the television and radio licence charge. This reform simply hasn’t been thought through.

The pensions reform is also socially unfair. The CHF70 will be paid out regardless of the financial circumstances of the beneficiary. Whether they need the CHF70 in old age pensions or not, all new pensioners will benefit from the pension expansion. The cost of this referendum sweetener will be carried by everyone through higher value-added tax, and by employers and employees through bigger wage deductions. This means there is less in their wallets at the end of the month, without the security of a restructured pensions system in return!

The old age pension reform is above all unfair to the younger generation. They will have to pay the biggest share of the reform with no prospect of ever being able to benefit from an old age pension themselves – the old age pension scheme will be in deficit again in 2027 already. Though we know that the challenges ahead will not diminish – rather they will increase, given the old age pension losses in the billions and demographic developments – this reform is simply postponing urgently necessary measures. The young will have to foot the bill for us “oldies”. This reform – which is no such thing – will expose the inter-generational contract to a severe stress test.

A small majority in parliament has succeeded in making things worse, not better with this reform. Instead of restructuring our social insurance for the long term, the expansion of the old age pension makes the situation even more precarious. Though trumpeted as an alleviation of the situation, it is instead preparing the way for the next debacle.

This is not how a reform works! I say a clear “No” to this socially unjust, so-called reform.

The views expressed in this article are solely those of the author, and do not necessarily reflect the views of swissinfo.ch. 

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Translated from German by Catherine Hickley