On September 25, 2022, Swiss voters will decide on the reform to stabilize the AHV (AHV 21). This reform will also affect occupational pension plans, for example by setting the retirement age and making them more flexible.
A healthy AHV is of utmost importance to the people of Switzerland, the Federal Council emphatically declares. In fact, however, after 25 years without comprehensive reform, the AHV is increasingly in financial distress. The reform would stabilize the AHV's finances for around ten years and secure pensions at the current level.
AHV expenditures rise faster than its revenues
Currently, 2.6 million pensioners receive an AHV pension. For most of them, it represents a significant part of their income. However, pensions are no longer secure because the AHV's expenses are rising faster than its income. First, baby boomers are reaching retirement age; the number of retirees drawing AHV is growing faster than the number of working people paying into the AHV. Second, as life expectancy increases, pensions will have to be paid out for a longer period of time. Thus, in a few years, revenues will no longer be sufficient to cover all AHV pensions. Over the next ten years, the AHV will require an additional CHF 18.5 billion to meet its financial obligations.
New pension reference age to be standardized for men and women
The AHV 21 reform would introduce a uniform AHV retirement age of 65 for both men and women. This would be the reference age for flexible retirement and would therefore be called the reference age: Anyone drawing a pension at 65 would receive it without deductions or supplements. The new reference age of 65 would also apply to occupational pension plans (pension fund).
The increase in the AHV age can mean a major cut in life planning for women who are about to retire. For this reason, the increase is to be cushioned with compensatory measures. These would benefit women born between 1961 and 1969 (when the reform comes into force at the beginning of 2024). The compensatory measures would consist of an early withdrawal at more favorable conditions or a supplement to the AHV pension if it is not drawn before the reference age. The compensatory measures would be socially graduated: Women who had a low income before retirement would benefit the most.
The Federal Council and Parliament believe that bringing the AHV age for women into line with that of men is justified. Their argument: women today are better educated than in the past, are increasingly employed and live longer than men. The compensatory measures would provide for a socially designed cushioning of the pension age increase. Around a third of the savings would thus go back to women.
Pension withdrawal to be made more flexible
Many older employees would like to gradually reduce their gainful employment, the proponents of the reform further argue. AHV 21 would meet this need. The pension could be drawn from any month between the ages of 63 and 70. In addition, partial pension withdrawals would also be permitted. As with the new retirement age of 65, this flexibility would also be anchored in the occupational pension plan at the same time.
The reform intends to create incentives to remain gainfully employed beyond 65. Those who continue to work after the reference age and pay contributions could now improve their AHV pension, up to a maximum of 2390 francs (married couples: 3585). This is due to the additional contributions, which would be taken into account when calculating the pension. This would not only help the insured themselves, who could close contribution gaps, but also the economy, which is in urgent need of skilled workers.
Increase in women's retirement age would reduce spending
Raising the women's retirement age would reduce AHV spending by around CHF 9 billion over the next ten years. The compensatory measures would cost around 2.8 billion francs in return. Further adjustments to benefits, such as flexible retirement, would increase AHV expenditure by around 1.3 billion francs. Overall, AHV 21 would thus reduce the AHV bill by around 4.9 billion francs by 2032.
Increase in value added tax becomes necessary
These savings alone are not enough to stabilize the AHV's finances and safeguard pensions. That is why AHV 21 also includes additional revenues. For this purpose, the value-added tax would be increased: The standard rate would rise from 7.7% today to 8.1%. Goods for daily use would be taxed less heavily. The reduced VAT rate applicable to them would rise from 2.5% to 2.6%, and the special rate for accommodation would rise by the same amount from 3.7% to 3.8%.
For the Federal Council, this minimal increase in VAT is justified and necessary. It contributes significantly to securing the AHV, he argues. If the AHV finances were to be stabilized with savings alone, a drastic reduction in benefits would be necessary.
Funding gap remains for next AHV reform
The increase in value-added tax would provide the AHV with additional revenue of an estimated CHF 12.4 billion by 2032. Together with the savings of around CHF 4.9 billion, this would relieve the AHV finances by around CHF 17.3 billion by 2032. According to calculations by the Federal Social Insurance Office (FSIO), a financing gap of around 1.2 billion francs remains, which Parliament wants to be addressed in a next AHV reform (Motion 21.3462 "Mandate for the next AHV reform").
Compromise for a stable AHV and secure pensions is balanced
The reform to stabilize the AHV is a balanced compromise of additional revenue and savings, explains the Federal Council. They warn: AHV 21 would secure the financing of pensions for the next ten years or so. In the last 25 years, no comprehensive reform of the AHV has succeeded. The longer we wait, the more expensive it will be for future generations to rebalance the AHV finances and secure AHV pensions.
Arguments of the opponents
Opponents of the bill argue that savings are being made unilaterally at the expense of women, even though they currently receive one-third lower retirement pensions (AHV and pension fund combined). Furthermore, this is only the first step, because retirement age 67 for all is already on the agenda. AHV 21 is the first of many reduction proposals that will affect everyone.
AHV reform consists of two bills
One proposal increases the value-added tax in favor of the AHV. This increase is a constitutional amendment that must be put to the vote. The other bill adjusts the benefits of the AHV. A referendum has been filed against these adjustments. The two bills are linked; if one of them is rejected, the entire reform will fail.