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Almost half of Swiss workers choose early retirement

Members of a cycling group for Swiss pensioners cycle through Solothurn, Switzerland, on July 26, 2018.
A Swiss pensioners' cycling group at Solothurn, Switzerland, on July 26, 2018. © Keystone / Christian Beutler

Around half of all people stop working before the official retirement age in Switzerland, according to new federal data.

On Tuesday, the Federal Statistical Office (FSO) reported External linkthat in 2019 between 40-50% of people started receiving their pension from their so-called second pillar before the legal retirement age – 65 for men and 64 for women.

Men tend to make this choice more than women – 46% compared to 40%, respectively.

The Swiss pension system is complex, and is based on three so-called pillars: old-age and survivors’ insurance (known as the AVS), occupational pension planning (often referred to as LPP) and private saving for old age encouraged through tax breaks. 

The FSO statistics confirm what has been observed on the Swiss labour market. Men can often afford to retire earlier. Fewer men work part time and thus generally have higher salaries than women so are able to contribute more into pension schemes. Men receive CHF2,144 per month from their second pillar (employer) pension compared with CHF1,160 for women.

“It is above all people who can afford to retire earlier,” Giovanni Ferro-Luzzi, professor of economics at the University of Geneva, told Swiss public radio, RTS. According to him, those with higher salaries who retire early often earn a higher pension than those who work till retirement age but earn less.

The vast majority of people who retire early do so voluntarily, while around 7-8% are forced to give up work, he added. But many people choose to continue working after retiring. A recent survey by the Swiss Life insurance group revealed that around half of all respondents to said they could imagine continuing to work after retiring. Around a third said this was already the case.

In Switzerland, the official retirement age is 65 for men and 64 for women. Moves are also in the works to raise the retirement age for the latter, although efforts to reform the country’s pension system are invariably subject to debate; in the past decades, two separate proposals to reform the system were rejected by voters at the ballot box.

The government says that the current situation, what with an ageing population, can only guarantee basic pension payments up to 2030.

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