Switzerland: Citizens vote for pension revolution – politics

A victory was in sight, but the fact that it would be so clear was surprising: this Sunday, the Swiss electorate voted in favor of the introduction of a 13th month pension with around 58 percent voting yes. The originator of the initiative, the Swiss Federation of Trade Unions (SGB), has achieved a first. Never in the history of direct democracy in Switzerland has the population approved a popular initiative aimed at expanding the welfare state.

Of course, Switzerland also has things like retirement provision, health and unemployment insurance or paid maternity leave. But the introduction of these social safety nets in the 20th and 21st centuries took a comparatively long time; The population often stopped them by referendum, so they only got through on the second or third attempt. This is consistent with the fact that popular initiatives (i.e. referendums on ideas from the population, not from the government or parliament) that wanted to introduce or increase welfare state benefits have so far never once succeeded at the ballot box. Time and again, the Swiss have refuted the thesis that more popular participation in politics leads to an expansive and expensive welfare state – until this Sunday.

A historic expansion of the welfare state – with unclear financing

By early afternoon it was clear that the initiative had not only convinced a majority of the population, but also a majority of the cantons. Both, the majority of the people and the so-called class majority, are necessary for a popular initiative to pass. Above all, the majority of estates is often a problem for left-wing projects because it gives the small, conservative cantons of central Switzerland a kind of veto right. But this time their no wasn’t enough.

From 2026 onwards, according to the new constitutional passage that has now been adopted, the country’s pensioners will receive a 13th monthly pension from the first pillar, old-age and survivors’ insurance (AHV). The authors’ core argument: Rents, health insurance premiums and food have recently increased to such an extent that older people are increasingly having difficulty making ends meet. A 13th pension prevents poverty in old age.

However, its inventors left open how the pension increase of a good eight percent would be financed – the central reason why the Swiss government and a clear majority in parliament rejected the initiative. The No camp had argued in the voting campaign that the future of the AHV was already threatened without a 13th pension due to demographic developments. Now the financing issue will inevitably become an issue again in parliament, where the initiative must be implemented. According to the authorities, this will either result in an increase in wage deductions or a higher VAT in order to raise additional annual costs of around five billion francs in the medium term.

The No camp spoke on Sunday of a “dark day for the boys.” On this historic day, Swiss voters not only accepted the 13th AHV pension, but also rejected the Young Liberals’ pension initiative, which was also up for vote. The Swiss Liberal Young Party’s plan envisaged raising the retirement age from 65 to 66 years and then linking it to life expectancy – all in order to secure the financing of the AHV in the long term. Around 75 percent of those who voted rejected this initiative. The Swiss could hardly have shown more clearly that new times have dawned in their once thrifty and economically liberal country.

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