Pensioners turn out in force to defend benefits

The protesting pensioners accused the government of undermining the Swiss welfare state Keystone

“Don’t touch my pension!” unions and pensioners chorused during protests in the Swiss capital, Bern, on Friday against proposals to cut retirement benefits.

Organisers denounced what they called the “putsch” of the Swiss interior minister, Pascal Couchepin, “against the welfare state”.

A former Swiss government minister, Ruth Dreifuss, joined around 600 protesters in Bern on Friday to demand that the current level of pension benefits be maintained.

Their message was aimed both at Couchepin’s proposals to raise the retirement age and reduce state pension benefits, as well as the government’s decision on Wednesday to cut the minimum rate of return on company pensions.

The protesters are demanding that the current level of state pensions be maintained, with an index that permits pensions to be adapted in line with the cost of living and with wage developments every two years.

They also want workers – including those on low salaries – to have the possibility of early retirement.

Outrage

It is Couchepin’s suggestions – made in the spring – that have caused the most outrage.

He said that to “save” the state pension scheme, the retirement age should be raised to 67 – from 65 at present. The rise would take place in two stages – from 2015, it would increase to 66 and from 2025 to 67.

Moreover, the interior minister wants pension payouts to be linked to inflation rather than based on final salaries as at present.

His proposals would bring costs down, but even with them the state would need more money to keep funding its pension commitments.

Couchepin wants to make up the balance by increasing VAT by 2.1 per cent until 2025 and 3.6 per cent until 2040.

Threat

The Swiss Federation of Trade Unions slammed Couchepin’s proposals as a “fundamental threat” to the social welfare state in Switzerland.

Unions and the Centre-left have vowed to block any moves to tamper with the retirement age.

Demonstrators also criticised Wednesday’s decision by the government to cut the minimum rate of return on occupational pensions by one percentage point to 2.25 per cent as of January 1, 2004.

It’s the second time rates have been slashed in a year. In January, the government reduced the rate of return to 3.25 per cent from four per cent.

Insurance

The big insurance companies have been complaining for some time that they can no longer guarantee such high returns on pensions when interest rates in Switzerland are so low.

But critics said the government had rewarded insurance firms at the expense of pensioners.

They also pointed out that rates of return on pensions were not increased when interest rates were high.

The government said the rate of return would now be reviewed on an annual basis. It added that this was necessary given the volatile nature of the financial markets, which had affected returns on investments.

swissinfo with agencies

Key facts

The interior minister, Pascal Couchepin, has suggested raising the age of retirement from 65 to 67.
Couchepin has also proposed linking pension payouts to inflation rather than basing them on final salaries as at present.
The difference would be made up by increasing VAT by 2.1 per cent until 2025 and 3.6 per cent until 2040.
On Wednesday, the government announced that the minimum rate of return on occupational pensions would be cut by one percentage point to 2.25 per cent as of January 1, 2004.