SWITZERLAND - Parliament-backed plans to cut benefits to the first-pillar pension provisions have been halted after 67.9% of voters rejected proposals cuts to pensions and the raising of women’s pension age.

The vote comes as a defeat for parliament, which needs voters’ consensus to implement bills.

Final results showed more than two thirds of voters refused parliament-backed cuts brought by the revision of the first pillar or Alters- und Hinterbliebenen-Versicherung, AHV and raise retirement age for women from 64 to 65 by 2009 to save 925 million Swiss francs (602.6 million euros) a year.

Parliament was also proposing to cut two billion francs a year in federal taxes, benefiting families, property owners and shareholders. These plans were rejected by 65.9% of voters, and VAT by 68.6%.

Turnout was “relatively high” at 50.3%, the Swiss press said.

On its official web site, the government said that without cuts, the AHV reserves could “strongly fall from 2010”.

The Social Democratic Party was quoted by the press as hailing the outcome of the vote as a sign that voters’ confidence in the centre-right government is fading. Party president Hans Jourg Fehr was reported to have said the party was a “clear winner”.

The outcome of the vote does not necessarily mean that the government is out of touch, but it is rather a sign that “it is always difficult to make cuts to pension benefits, especially benefits so many are entitled to” said Professor Emanuel von Erlach of the University of Bern.

The political scientist told IPE that as the first pillar is still solvent, people do not yet see a need for change but voters’ attitudes might change in the future.

The professor also said that presently the issue of Lebensarbeitszeit was being debated in the country with mixed feelings.

If the idea of Lebensarbeitszeit, or life-work time, became law, workers would not retire when they reached the pre-set pension age but when their allocated working time target has been reached, no matter what age.

Von Erlach said that trade unions representing workers with hard physical jobs would be against the idea, while categories of higher paid workers, those who generally are in a position to save more for their pension provisions, might like it.

Topics