Swiss pension reform: the latest changes

Women in the so-called transition generation born between 1961 and 1969 are entitled to financial compensation measures. Keystone

New provisions have applied to old-age pensions since January 1, 2024. The new regulations offer opportunities for a more flexible lifestyle, but they also pose challenges.

These are the most important changes since January 1, 2024:

– Expansion of the flexibility of pension payments
– Incentives for gainful employment after 65
– Raising the retirement age (now called the reference age) for women to 65 (from January 1, 2025)

On September 25, 2022, the Swiss electorate approved the reform package to stabilise the pension scheme. This aims to secure and maintain the level of old-age pensions, ensure the financial balance of the system over the next decade and meet the need for flexibility.

Amendment 1: Harmonisation of the reference age

The reference age is no longer referred to as the retirement age. This measure is particularly well known as the reference age for women is now also 65. However, this increase will not be abrupt, but gradual and will apply from 2025.

Amendment 2: Financial compensation measures for women in the transition generation

By adjusting the reference age, women in the so-called transition generation born between 1961 and 1969 are entitled to financial compensation measures.

On the one hand, the retirement pension for women born in these years will be reduced less than before if they take their pension early.

Second, a woman from the transitional generation who draws her old-age pension at the normal time receives a monthly pension supplement depending on her income and year of birth, which is paid for life.

If a woman has no gaps in her pension contributions, this pension supplement amounts to a minimum of CHF12.50 ($14.30) and a maximum of CHF160 a month.

Amendment 3: More flexibility in retirement

Early withdrawal or deferral of the old-age retirement pension has been possible for some time. Previously, the retirement pension could either be drawn one or two years early or deferred for up to five years after reaching the normal retirement age. Only the entire pension could be deferred or drawn early.

With the reform, it will now also be possible to draw only part of the retirement pension. For example, 20% of the retirement pension can be drawn at the age of 63 and the remaining 80% at the age of 65. The same applies if someone wishes to defer drawing their old-age pension.

This flexibilisation may be interesting in theory, but in practice it will lead to a large number of options and corresponding questions that will have to be weighed up individually.

>> In March 2024, Swiss voters approved a 13th monthly pension payment:

Special case of voluntary pension insurance

There will be a specific change for people who are insured under the voluntary old-age pension scheme from 2024: until now, early withdrawal of an old-age pension automatically meant exclusion for members of the voluntary scheme.

From now on, voluntarily insured persons can withdraw their retirement pension early and still continue to pay contributions until they reach the reference age. These contributions and contribution periods then often lead to a higher pension when recalculated at the reference age.

Pension calculation tool adjusted

Over the past 12 months, the Central Compensation OfficeExternal link has adapted all applications so that they will function in accordance with the new legal provisions as of January 1, 2024. This affects the centralised applications such as the ACOR pension calculation tool, the registers and the specialist applications used at the Central Compensation Office.

Practical tips from the Central Compensation Office

If you are considering various options (such as early withdrawal or continuing to work) and are unsure about the likely amount of your retirement pension, the Central Compensation Office recommends requesting a pension forecastExternal link as soon as possible. Women born between 1961 and 1969 can also have their personal reference age, pension supplement and reduction rate calculated without obligation on the website of the Federal Social Insurance Office under “Individual enquiriesExternal link“.

Translated from German by DeepL/ts