Swiss vote to give themselves a bigger pension
Swiss vote to give themselves a bigger pension
Majority votes for a '13th month' payment to address a cost of living crisis, but the government says it could not afford it.
The title is misleading. Switzerland pension system is complex and divided by redistribution and capitalization.
The vote of today concerns the pension by redistribution – the first pillar. Employers and employees are contributing for this part of the system as a percentage of the salary. The maximal pension is 2500 Swiss francs (2’829 USD). People will receive a rise equivalent to 1/12 of the yearly pension.
The pension by capitalization – second pillar – follow the same system, with employers and employees contributing for it. But, it is not concern by the vote.
First and second pillar are mandatory by law. In Switzerland, you have a third pillar, which isn't mandatory. It's mostly investment, like life insurance.
The title and the image make me feel like aging population voted so younger people pay more for the pensions.
This did happen, but primarily due to propaganda of the right wing which tried to portray this as an old vs young conflict, when actually it's a poor vs rich conflict.
Tax might rise a little bit for working people due to this, but as the rent that was expanded here (AHV) is a great distribution tool, around 90% of the population will later get more money back in rent than they're paying into it now.
Also, the method to finance this is not yet set. Some centrist politicians are open to financing this by raising a tax on finance market transactions, which would probably be the most social. (And of course lefties like me would love to finance this with an inheritance tax, but that has almost no chance)
Yeah, it's very rare for more funds being obtained from taxing richer part of population. A quick google search gave this opinion of Swiss finance minister:
Finance Minister Karin Keller-Sutter has said that since Switzerland is already running a budget deficit, the approval will likely require an increase of value-added tax.
As someone from the USA, I am curious how would this work? The bill mandates that payments go out, but if it is not tied to a specific source of income to compensate, and some hard year happens (maybe this upcoming one) and there are insufficient funds, what happens then?
Actually, the pension by redistribution – which is concern by the vote – has $56.57 billions in reserve. This money doesn't sleep. Switzerland is using it has an investment found.
But, the Confederation has already thought about how to finance. There are two main propositions. The first is employers will have to contribute more. The second is that employers and employees will contribute as well as a higher VAT.
As someone from the USA, don’t you know how this works? Congress votes for stuff without worrying about how to pay for it all the time. When there are hard years, you issue more debt. When there are easy years, you issue less debt but still don’t really reign in debt because your constituents demand more stuff and less taxes.
This is the best summary I could come up with:
Swiss voters have given themselves an extra month's pension each year - in a nationwide referendum focusing on living standards for the elderly.
The proposal to increase pensions came from the trades unions - but was opposed by the Swiss government, parliament, and business leaders, who argued it was unaffordable.
This time they said enough was enough, using the power that Switzerland's system of direct democracy gives them to vote themselves an extra month's pension each year.
The result was described as a "historic victory for retirees" by Avivo, a Swiss association that defends the rights of current and future pensioners.
The move brings the state pension into line with Switzerland's salary system, which is also paid in 13 instalments, meaning workers get a double payment in November.
Voters, though, looking at Switzerland booming economy, whose success is in large part thanks to their hard work, clearly believe their country can afford it.
The original article contains 426 words, the summary contains 153 words. Saved 64%. I'm a bot and I'm open source!
Let's #wetoo !!!!
🤣 Good luck paying for it.
Die Schweizer sind eins der reichsten Länder Europas, bzw. auch der ganzen Welt. Die kriegen eine kleine pensionserhöhung sicher bezahlt
Will somebody think of billionaires ?