Swiss Error Means $3.5 Billion Narrower Pension Fund Deficit

(Bloomberg) — Switzerland made a mistake in calculating its pension deficit that has left its retirement system with an unexpected boon.

The shortfall for the so-called AHV will now be about 4 billion francs ($4.7 billion) in 2033, down from more than 7 billion francs previously assumed, government officials said in a statement on Tuesday.

Pensions are a contentious topic in Switzerland, where a plebiscite earlier this year unexpectedly saw voters back an increase in pensions. 

Since then, ministers — who had recommended rejecting the measure — have been struggling to come up with the necessary funding, and are pondering a hike of value-added tax. It’s unclear how exactly the smaller shortfall in the system will help them.

“With its negative fear scenarios, the federal government has significantly influenced AHV policy and exerted great pressure to cut benefits,” the association of labor unions said in a statement reacting to the announcement. “Employees and pensioners have been misled.”

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