After the twists and turns of the federal elections in October and the Federal Council vote in December, Switzerland is set to vote on two new referendums on March 3, 2024. Here’s all you need to know about the Pension Initiative and the Initiative for a 13th AHV pension.

Swiss referendum guide for March 3, 2024

For the first time since June 2023, Swiss citizens will be going to the polls to vote on national referendums. The latest round of voting, scheduled for March 3, will also be the first since the new parliament, Federal Council and President of Switzerland were sworn in back in December.

Both are federal popular initiatives, meaning they have been brought to a vote after securing enough signatures from the public. Here’s all you need to know about the proposals:

Swiss citizens to vote on a 13th AHV pension payment

First, voters will decide on the Initiative for a 13th AHV pension, also known as the “For a better life in old age” initiative. As the name suggests, the law demands that those claiming pensions in Switzerland receive a 13th month of pension payment as part of their Old-Age and Survivor’s Insurance or OASI (AHV in German), similar to the two months of salary given at the end of the year as part of some work contracts. 

Currently, OASI payments for individuals vary between 1.225 and 2.450 francs a month and up to 3.675 francs a month for those who are married. Payments are determined by how much a person earned while they were working and how long they paid into the scheme. 

The 13th month of pension would be paid in addition to the payments already given as part of the scheme, meaning every recipient and therefore every pensioner would get more money. The scheme is expected to cost 4,1 billion francs a year, although the referendum leaves the question of financing open for the government to answer. 

Arguments for and against the 13th month of pension

Those in favour of the scheme (Social Democratic, Green and Alternative Left parties) argued that amid the consistent rise in the cost of living, including rent, health insurance and more, current pension schemes are becoming insufficient. They made the point that recent reforms to the OASI system mean that pension funds are now able to afford the change - in 2022, OASI funds recorded a collective profit of 1,6 billion francs and assets of 47 billion francs.

By contrast, opponents of the 13th month of pension, including most political parties and the Federal Council, argued that the idea would have a catastrophic effect on the long-term viability of the pension system. The Federal Social Insurance Office (FSIO) has already predicted that the pension system as a whole will face a deficit in 2031, even without the 13th month of pension.

With a quarter of the population set to be in retirement by the end of the decade, opponents see the expansion as an unnecessary burden on both federal finances and the tax system. Lawmakers argued that efforts should instead be focused on ensuring that OASI schemes remain available for the next generation.

Switzerland to vote on raising the retirement age... again

Indeed, the Pension Initiative was proposed with that stability in mind: over one year after citizens voted to raise the retirement age for women to 65, to be in line with men, this initiative seeks to raise the retirement age of all people to 66 by 2033. 

After the change, the official retirement age would be pegged to Swiss life expectancy. In practice, this will mean that if life expectancy rises, 80 percent of the increase will be added to the retirement age. The FSIO predicted that the reform should save pension funds 2 billion francs by 2030, and should guarantee the pension system until at least 2033.

Voices for and against raising the Swiss retirement age

In announcing the referendum, The Young FDP made the point that higher life expectancy, a decline in the birth rate and the rising number of people retiring were putting mounting strain on the pension system. They argued that it is only a matter of time before the pension age rises and that the country could face higher taxes or debt if their “fair for all generations” proposal is rejected.

In response, the Federal Council and parliament wrote that while they “share the initiators' concern to find a sustainable solution to the financial challenges of the pension system", tying the retirement age to life expectancy is far too rigid and simple. “The automatism anchored in the constitution would take effect, no matter what the situation of older workers looks like. The retirement age would have to be increased, even if the economy is in recession,” they argued. 

Officials added that it was inappropriate to raise the retirement age so soon after it was raised for women and that enshrining automatic pension age rises into law would be un-Swiss as it would remove the decision from future political discussion. "Retirement provisions must be continually adapted to social developments. In a direct democracy, there must be an ongoing political dialogue about central questions such as the retirement age,” they wrote.

May 18 will see the next round of referendums in Switzerland

After the referendums on March 3, the next set of Swiss national votes will take place on May 18, 2024. For more information about the current set of referendums, check out the election portal of Canton Zurich.