Updated March 3rd, 2024 at 19:02 IST

Switzerland votes for increased elderly pension payments in referendum

The preliminary projections from public broadcaster SRF indicate that 58% of participants supported the measure.

Reported by: Business Desk
Pension | Image:Pexels Photo

Switzerland pension boost: Switzerland has voted in favour of increasing pension payments for the elderly in a referendum held on Sunday, defying concerns about affordability from the government. Preliminary projections by public broadcaster SRF showed that 58 per cent of participants supported the measure, which entails a 13th monthly payment per year, while 42 per cent were against it. This outcome surpassed expectations from final polls, indicating a more emphatic victory for the proponents of the pension increase.

The initiative, championed by the Swiss Trade Union Federation and left-of-center parties, is now contingent on securing majority support from Switzerland's 26 cantons. Given the margin of victory in the referendum, it is likely to meet this threshold, as reported by the broadcaster.

Lukas Golder from polling firm gfs bern hailed the result as a milestone from a union perspective. However, the government, business lobbies, and parliament, which leans toward the right, have rejected the proposal, citing financial concerns. Historically, Swiss voters have been cautious about supporting measures perceived as risky for business interests.

The decision to increase pension payments contrasts with previous referenda where proposals for shorter working weeks and more holidays were decisively rejected. Concerns about the rising cost of living have been widespread, with Zurich, Switzerland's largest urban area, sharing the title of the world's most expensive city with Singapore in a recent study by the Economist Intelligence Unit.

One voter, Mery, a 65-year-old from Zurich, expressed support for the increased pension payments, stating that it made sense, especially in retirement. She stressed the importance of having a bit more financial flexibility, even to support her grandchildren, reflecting the sentiment amongst many retirees.

Despite the approval of the pension increase, the specifics of how it will be funded remain unclear. Currently, Switzerland's minimum old age and survivors (AHV) pension stands at 1,225 Swiss francs ($1,393) per month, with a maximum of 2,450 francs for individuals and 3,675 francs for couples.

Alongside the pension increase, Swiss voters also weighed in on an initiative to raise the statutory retirement age, which was ultimately defeated.

(With Reuters Inputs)

Published March 3rd, 2024 at 19:02 IST