Old-Age and Survivors' Insurance (OASI) is the foundation of the Swiss pension system. More than 2.5 million pensioners currently receive an OASI pension, which is intended to provide adequate cover for basic needs in old age. Most pensioners have other income, most commonly a pension from an occupational pension scheme. Anyone who is unable to cover their living expenses can claim supplementary benefits.
The initiative aims to increase OASI retirement pensions by one month's worth. A 13th pension payment would be added to the 12 monthly pension payments each year. The initiative also stipulates that supplementary benefits could not be reduced because of the 13th pension payment. The maximum annual retirement pension would be increased by CHF 2,450 to CHF 31,850 for individuals, and by CHF 3,675 to CHF 47,775 for married couples. If introduced, the 13th OASI pension payment would probably cost around CHF 4.1 billion; the federal government would have to pay around CHF 800 million of this sum. After that, costs would continue to rise rapidly. The initiative leaves the question of funding open. Thanks to various reforms, OASI benefits are currently well funded; however, deficits are expected after 2030 – even without a 13th OASI pension payment. If a 13th pension payment was introduced, OASI would need additional income or it would have to cut benefits.
Old-Age and Survivors' Insurance (OASI) pensions are securely funded for the coming years. Two reforms in the last five years have helped significantly to bring this about. Salary contributions and VAT have been increased and the retirement age for women has been raised to 65. This mix of increased income and lower expenditure will stabilise OASI finances until around 2030. In the medium term, however, OASI faces major financial challenges. Firstly, the number of pensioners is increasing faster than the number of workers who pay into the OASI scheme. Secondly, pensions will have to be paid out for longer as life expectancy increases.
The Pensions Initiative aims to secure the long-term funding of OASI by raising the retirement age. It is calling for the retirement age for women and men to be gradually increased to 66 by 2033. The retirement age would then be linked to average life expectancy: the retirement age would be increased automatically if life expectancy increases – not one-to-one, but only by 80 per cent of the increase in life expectancy and in steps of no more than two months per year. If the initiative is accepted, this would relieve the burden on OASI finances; raising the retirement age to 66 would probably reduce OASI expenditure by around CHF 2 billion. The automatic adjustment of the retirement age in line with rising life expectancy would also ease the burden on OASI.