Radical Party head Petra Gössi says that pensioners living abroad generate no added value as they don't pay taxes and are not consumers in Switzerland
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A proposal to cut old age pensions for beneficiaries living outside Switzerland has caused a public uproar. The debate on a reform of the state pension scheme, ahead of a vote in September, promises to be heated.
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3 minutes
Balz Rigendinger, swissinfo.ch
The Swiss old age pension system is under pressure – the number of beneficiaries keeps growing but there are fewer contributors, causing the risk of a serious deficit.
The proposal to cut the pensions of people living abroad comes from the Petra Gössi, the head of centre-right Radical Party, one of the main political parties in Switzerland.
It would not only target the around 360,000 workers from Italy, Spain and Portugal who have spent a good part of their active professional lives in Switzerland, often in lowly-paid jobs, and have gone back to their countries of origin for retirement, but also the Swiss abroad community.
“Old age pensioners living abroad don’t create value. They neither pay any taxes nor do they spend money [in Switzerland],” she is quoted as saying by the Friday edition of the tabloid Blick.
“We give them a golden handshake and the next generations will have to foot the bill,” she adds.
Her comments come as a campaign ahead of a nationwide vote on September 24 on a controversial reform of the old age pension system gets underway.
The reform includes an additional CHF70 ($72) per month for future pensioners (while raising the retirement age for women by one year to 65 in line with men).
Making a difference
CHF70 might not look like a lot of money, but it makes a difference for many pensioners living abroad. They currently receive between CHF450 and CHF490 per month.
But these payments to beneficiaries outside Switzerland people account for just 13% of pensions that are paid out, according to official data.
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Gössi’s statements have unleashed an angry reaction.
The president of the main Unia trade union group, Vania Alleva, has criticised Gössi’s comments as shameful and utterly contradictory.
“Italians and Spaniards who help build modern-day Switzerland are the victims [once again],” she told Blick.
A syndicated report in the Tages-Anzeiger and Der Bund newspapers pointed the finger at Gössi for targeting old age pensioners with small benefits. It is ironic, observed the article, that her party always refused to discuss excessive manager salaries.
Cost of living
No matter how this debate will continue over the next weeks, the Swiss Abroad community and its pensions are now part of it.
A closer look at the payments made to Swiss Abroad citizens show that these make up 4.69% of the pension total. That is: CHF123,364 per month.
On average, Swiss nationals living overseas receive CHF1,151 per month. This is more than twice the average pension for non-Swiss beneficiaries living abroad (CHF491).
Most of the pensions go towards Swiss expats in neighbouring France and Italy: 25,000 and 9,500 payments respectively. Some 2,300 recipients are in Thailand.
Seeing potential savings, politicians from the centre-right and the right have called for pensions to be adapted to the living costs of the countries of residence of the recipients.
Their proposal may help reduce these payments worth a few thousand francs every month, but it is likely to cause a lot of political trouble.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
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Concerns about the country's old age pension scheme and health insurance coverage were high on the agenda of the most recent assembly of the Swiss Abroad Council. The delegates, meeting on the shores of Lake Lucerne, raised a series of practical problems.
“Social security issues have been a recurring topic for the Organisation of the Swiss Abroad (OSA), just like e-voting or problems for many expats to open a bank account in Switzerland,” said OSA co-director Ariane Rustichelli during Saturday’s meeting in Brunnen.
Since a reform of the old age pension system is underway in the Swiss parliament, the expat assembly focused on a voluntary scheme for Swiss citizens living outside the European Union or the countries of the European Free Trade Association (EFTA).
Currently, 14,000 people from outside the EU/EFTA – or 5% of the total number – benefit from the voluntary old age pension scheme, according to the Federal Social Security Office.
In giving a short history of the voluntary state pension scheme, Roberto Engeler, a leading member of the OSA, conceded flaws in the system since its beginning in the late 1940s.
“Reforms of the scheme were introduced at the expense of the weakest members of society or those who temporarily live outside Switzerland and miss out on regular contributions,” he added.
“The problems are increasing,” he warned and called on the government to consider possibilities for a voluntary old age pension scheme regardless of the country of residence of the Swiss expats.
Reforms
Jürg Brechbühl, director of the Social Security Office, said a revision of the voluntary scheme could be tackled once the mandatory state old age pension scheme was successfully reformed.
Parliament agreed to overhaul the voluntary system in 2001 because of Switzerland's bilateral treaties with the EU, notably limiting the circle of beneficiaries and increasing the rate of contributions.
However, Brechbühl acknowledged that efforts were necessary to improve cooperation with other countries and between the different pension systems, especially when it comes to simplifying the control mechanism.
“It won’t be easy and it will take time,” he cautioned.
The voluntary pension scheme ran up a deficit of CHF37 million ($38.2 million) last year, mainly because the financial payments made exceed the amount of contributions, as Brechbühl explained.
Health insurance
Delegates taking part in workshops at the Swiss Abroad Council also identified a series of problems with health insurance coverage.
Some participants wondered why health insurance premiums for expats are so much higher than in Switzerland. Others pointed out practical problems for Swiss citizens returning to Switzerland at retirement age.
There were also questions about apparent difficulties with having additional health insurance coverage or with finding specific information about insurance schemes in other countries.
In response to the questions, Olivier Peters of the Federal Health Office said Switzerland’s mandatory health insurance coverage was very good compared with other countries. He assured the delegates the government had to plans to change the existing system for the Swiss living abroad.
Anniversary marked
On Saturday, the Swiss Abroad community also celebrated the 25th anniversary of the Swiss expat square in Brunnen on Lake Lucerne.
Set up in 1991, the 5,400 square metre open park site opposite the Rütli meadow is meant to show the affiliation of the Swiss Abroad to their home country.
Swiss President Johann Schneider-Ammann opened a special exhibition of posters telling the lives of Swiss emigrants.
The board of the foundation in charge of the site also awarded Swiss-Australian illustrator and author Lucienne Fontannaz-Howard a one-month grant as artist in residence.
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