The Swiss Actuarial Association – Schweizerischen Aktuarvereinigung – is backing an initiative in favour of increasing the retirement age in line with life expectancy in a referendum that will take place on 3 March.
The longer it takes to adjust and automate the mechanism to increase the retirement age, the greater the loss will be for the pension system in terms of financial sustainability and even more drastic steps will be necessary in the future, the actuaries said in a statement.
An automatic adjustment of the retirement age to life expectancy secures pensions in the long term, meeting the needs of retirees in a changing society, without putting an excessive burden on those paying contributions, it added.
The Renteninitiative, as it is called, was launched by the Young Liberals (Jungfreisinnige) to increase the retirement age of men and women to 66 years old, gradually, until 2033. The retirement age will continue to rise in line with life expectancy after 66.
The retirement age increases automatically with life expectancy, but not in a one-one ratio, rather by 80% of the increased life expectancy, and maximum of two months per year, according to the initiative.
The Renteninitiative is an appropriate response to demography challenges that are associated with building up provisions for retirement, the actuaries added.
Increasing the retirement age in line with life expectancy contributes significantly to the financial sustainability and stability of the Swiss pension system, especially of the first pillar AHV, it added.
Under the proposal put forward by the Young Liberals, the expected duration of pensions is not given, unlike models in other countries, the association noted. Questions on technical issues remain with regard to the implementation of the model, it added.
“With life expectancy, the initiative addresses exclusively an element that cannot be influenced politically,” the actuaries said.
The Swiss government has, however, spoken in favour of a political intervention to support the country’s first pillar pension system, and linking the retirement age with life expectancy, preparing the ground for further reform of the system.
Parliament and the government have recommended to reject the proposal of the Young Liberals in the upcoming referendum, saying that retirement age will be determined only by a mathematical formula, and the automation is too rigid, while other aspects must be taken into account, like economic development, and labour market.
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