As Switzerland debates how to make the pension system more sustainable in the long term, experts speaking to the media have started to advocate a radical new proposal. According to Blick, many pension experts have called for a new system where pension payments are based on the number of children the claimant has.

Swiss pension reform: Should childless retirees earn less?

In the report, published in the Neue Zürcher Zeitung (NZZ) and covered freely by Blick, Swiss pension experts have argued that having children should be better rewarded when parents retire.

In its strongest form, this includes a proposal that would see childless couples and individuals pay more into or receive less pension than parents. An alternative system would see pension payments based partly on the number of offspring the claimant has - the more kids you have, the more you receive in pension.

Experts continue to debate how to secure Swiss social security

The proposal is gaining popularity among experts as a way of solving the imbalance between the declining number of young people contributing to the pension system and the increasing number of people who are claiming the benefit. The theory goes that the system would incentivise couples to have children, who would then go on to contribute to the pension system.

In the words of Blick, “Whoever raises children contributes to the community at their own expense. Ultimately, today's children are tomorrow's pension contributors.”

Low birth rate to put huge pressure on pension system

Speaking to the NZZ, pension expert and economist at Swiss bank and investment firm UBS, Veronica Weisser, argued that the pension system is becoming increasingly unaffordable because of the low birth rate. The latest data from the Federal Statistical Office found that in 2022, the average number of children per woman fell to 1,39, well below the replacement rate - today, one in four women in Switzerland never have any children.

In the words of Weisser, if the birth date does not rise, it could lead to a “significant worsening of financial bottlenecks in our social system.” She added that this problem will soon become apparent for health insurance providers as well, with older and typically more ill people having to be compensated for by a decreasing number of young people.

Childless pensioners should pay their own way, expert argues

Weisser also made the point that those without children also benefit from lower costs. For instance, the latest report from officials in Canton Zurich estimated that a child costs between 1.000 and 1.600 Swiss francs a month to raise. The expert noted that once parents with two children reach retirement, they are usually “a good million francs worse off” than they would have been if they chose to go without children.

With pension payments tied to the number of children raised, Blick explained that childless people would then have to use the savings generated from not having kids to pay for their retirement, rather than have pensions “subsidised by other people’s children.”

Pension proposal generates mixed response in Swiss parliament

While it may be gaining traction within expert circles, several questions remain regarding how practical the idea would be - the main questions being: Would couples who are unable to raise children be given the same penalties as those who have chosen to not have kids, how would the criteria for benefits be defined and how would families be able to afford to have more children, considering the benefits will likely only arrive once the children reach maturity?

Politicians from across the political spectrum also seem to be hesitant to endorse the policy, with National Councillor Philipp Matthias Bregy commenting that he is “rather sceptical of this proposal, even if it seems attractive at first sight.” He added that it would take a massive political and social effort to make the idea a reality. Considering the referendum system in Switzerland, it would also be unlikely to pass in the first place.

FDP. The Liberals vice-president and National Councillor Andri Silberschmidt also found the idea somewhat lacking: “Firstly, the state should not prevent people from family planning, neither by incentives nor by obstacles. Secondly, the pension system must remain a guarantee of existence for all.” While he agreed that families should be helped with the cost of raising children, he said it should be done via other means.