Row over National Bank profits gathers pace

Green parliamentarian Ruth Genner pleads for the new funding scheme Keystone

Proponents of a plan to use profits of the National Bank to prop up the state pension scheme have stepped up their campaign ahead of a nationwide vote next month.

They insist their initiative does not threaten the bank’s independence nor deprive the cantonal authorities of funds.

A cross-party committee, including the centre-left Social Democrats, the Trade Union Federation, the Greens as well as the Protestant Party, said approval of their proposal would help ensure the financial future of the ailing pension scheme.

They added that it would make an increase in Value Added Tax for the next ten years unnecessary as well as plans to raise the retirement age from 65 to 67.

“The old age pension scheme is the most important pillar of our social security system,” said parliamentarian Ruedi Aeschbacher.

He said more funds were needed to prop up the scheme amid a growing number of pensioners and a further increase in life expectancy.

Colette Nova of the Trade Union Federation dismissed allegations that the National Bank would come under undue pressure to prop up the pension scheme.

Parliamentarian Marlyse Dormond argued the bank’s independence was anchored in the constitution. She said the latest half-year figures showed it was realistic to expect annual profits of about SFr4 billion.

Under their plan all but SFr1 billion ($0.8 billion) of the profits, which would still go to the country’s 26 cantons, are to be used for old age pension benefits.

At present, the cantons are the main beneficiaries, receiving a two-third share with the other third going to the federal authorities.

Excess gold

Observers say the initiative stands little chance of being accepted at the ballot box on September 24.

The government, parliament, the cantonal authorities as well as a three of the four main political parties and the National Bank are recommending a no vote.

Another scheme to use the proceeds from the sale of 1,300 tons of the bank’s surplus gold to help the needy was thrown out by parliament at the end of 2004. Instead the cabinet decided to divide the funds – an estimated SFr14 billion – among the federal government and the cantons.

It ended an eight-year debate on what to do with the earnings from gold sales. In 2002, the electorate rejected a similar proposal to use the money for poverty reduction.

swissinfo with agencies

In brief

The state-run insurance scheme is aimed at providing a minimum cover for all people over the age of 65 (men) and 64 (women), surviving dependents and those who need constant care.

Set up in 1948 it is the backbone of Switzerland’s social security system.

All people living and working in Switzerland have to contribute to the scheme which is funded mainly by employers and employees.

Key facts

National Bank profits:

First-half 2006: SFr1.96 billion
2005 profits: SFr12.8 billion
2004 profits: SFr400 million