Swiss Voters Shoot Down Government’s Pension-Fund Reform

(Bloomberg) — Swiss voters rebuffed a government plan to reform company pension funds, marking the second time this year that a proposal to adapt the country’s retirement system to changed demographics was rejected in a plebiscite.

The bill to increase wage deductions and reduce retirement payouts — in order to cope with higher life expectancy — was supported by just 32.9% of the electorate, according to final government results published on Sunday. 

“Now we stick with the status quo,” Switzerland’s leading business lobby economiesuisse said in a statement. Regardless, “reforms will be needed due to demographic change, increasing life expectancy and changing labor models,” it added.

The plan had also envisioned higher payments to low-earners. Particularly women would have profited from that, according to the government. Still, after parliament had passed the bill, unions collected more than 50,000 signatures to challenge it in a referendum, claiming that the plan was a fraud because employees had to pay more while getting less.

“We still have an unsolved problem, namely the pension gap for women,” Maya Graf, a Green lawmaker who had supported the bill against the majority of her party, told broadcaster SRF. Women received 44% less than men in benefits from their pension funds, Graf said. “Women therefore continue to run the risk of slipping into poverty in old age.”

Citizens also voted against an initiative to expand the protection of nature reserves and thereby limit construction. Polls ahead of the ballot had predicted both outcomes. Turnout was at 45%.

In March, voters had rejected a proposal to raise the retirement age and subsequently tie it to life expectancy. Instead, the ballot went in favor of a plan to raise pensions with a 13th annual payment. To meet this demand, the government now plans to raise the sales tax.

On company’s pension funds — the second pillar in the Swiss retirement system — the government will now likely have to draw up an alternative reform to make the scheme future-proof. While demographics mean this needs to be tackled, there are no hard deadlines for the Federal Council to present a new plan. 

The government mustn’t skirt its responsibility on pensions, Interior Minister Elisabeth Baume-Schneider told reporters in Bern, adding that she will be reaching out to concerned parties. “We must ensure that Switzerland keeps its promises, including the promise of a dignified and financially secure life in old age for all.” 

In Switzerland’s system of direct democracy, citizens vote as much as four times a year on issues ranging from taxation to rules on how cows are reared. That a government plan falls through in a referendum is uncommon, according to pollsters.

(Updates with comment from minister in ninth paragraph.)

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