The Federal Council is open to a higher retirement age

For the first time, the Federal Council had to deal in depth with the idea of ​​gradually increasing the retirement age for women and men. He’s not against it, but doesn’t want it to be automatic.

The Federal Council speaks out against the AHV initiative of the Young Liberals, but not against an increase in the retirement age in and of itself.

Goran Basic / NZZ

A fierce voting battle is brewing. On September 25, the people will decide on the “AHV 21” reform. The financially most important measure consists of a renewed increase in VAT. But another element of the bill is the most controversial: raising the retirement age for women from 64 to 65. This step would be financially cushioned for the first nine cohorts who will retire after the reform. The pensions of these women should be higher for life than under the rules that apply to men.

No matter how the vote ends: The AHV is not out of the woods. Even if the people accept the proposal, the next step should not be too long in coming because the number of pensioners will continue to rise sharply in the foreseeable future. According to current projections, pay-as-you-go financing will tip back into the red in 2029. What to do?

After nine years, the autopilot takes over

One possible answer is the “pension initiative” of the young liberals, which was an issue in the Federal Council on Friday. After a long back and forth in advance, he now has the message adopted for this. The initiative calls for a general, gradual increase for both sexes. First, the retirement age is to rise gradually to 66 within nine years.

After that, the autopilot would take over: Whenever average life expectancy increases, the retirement age should also automatically increase. However, the text of the initiative does not provide for a 1:1 rule: if life expectancy increases by 1 month, the retirement age would have to increase by 0.8 months. Thus, the duration of pension payments would continue to increase, but not as much as before. If the health development continues in a similar way, the retirement age should be around 67 around the year 2045.

The retirement age is to be gradually increased

Expected development if the 2024 pension initiative is adopted

The Federal Council found the initiative noticeably difficult. It was the first time he had to delve deeply into the unpopular subject. There was hope in the bourgeois camp that he would respond to the demand and present a counter-proposal. It is obvious that the Federal Councilor responsible for the dossier, the Social Democrat Alain Berset, had no interest in this: on the one hand for party political reasons, on the other hand because he does not want to endanger the “AHV 21” template.

However, his bourgeois colleagues could have forced Berset to draw up a counter-proposal. However, the rule was confirmed that people in the collegiate government are reluctant to mend each other’s stuff – especially in today’s composition. The bourgeois quintet allowed Berset to play. On Friday, the committee finally decided to refer the initiative to Parliament without a counter-proposal and to recommend that it be rejected.

A memorable sentence

Nevertheless, the initiators can claim a small success: the Federal Council speaks out against the initiative, but not against an increase in the retirement age in and of itself. On the contrary, this memorable sentence can be found in the message: “Increasing the reference age beyond 65 for men and women is a justified measure as an adjustment to the development of life expectancy and as a contribution to securing the financing of the AHV. »

If the Federal Council already knew this, why isn’t it presenting a counter-proposal? In the message, Berset and his colleagues leave it at a vague announcement: In the next AHV reform, which they have to present at the behest of Parliament by the end of 2026, they want to address the question of the retirement age. Specifically: You will examine whether and how a link could be created between life expectancy and retirement age.

It is clear that the Federal Council does not want any automatism, as proposed by the pension initiative. He is categorically against outsourcing the determination of the retirement age to an autopilot that is based solely on demographics – the development of life expectancy. You also have to take into account the socio-political situation and the situation on the labor market, especially for older employees. At the same time, a study commissioned by the Berset department refutes the popular argument that the labor market cannot cope with rising retirement ages.

A matter of power

All of these questions are also about power. The Federal Council does not want politicians to be disempowered in a neuralgic issue such as the retirement age by being bound by clear rules. His warning: This would not only deprive him, but also parliament and the electorate, of the leeway to consider other criteria. However, this is exactly the intention behind such rule bindings: They are intended to prevent the majority that sets the tone from finding reasons why now is not the right time for an unpleasant step.

The initiators go to court harshly with the Federal Council. His arguments are flimsy, he pulls the boys over the table. In a statement, Matthias Müller, the President of the Young Liberals, criticizes that he is destroying intergenerational justice. The reaction of the FDP is somewhat friendlier, but it also describes the action of the Federal Council as “very disappointing”.

Initiative could be counterproductive

Next up is Parliament. Whether a counter-proposal becomes an issue there depends primarily on the outcome of the vote on “AHV 21” in September. In the event of a no, in particular, the pension initiative could entail major tactical complications – indeed, it could even prove counterproductive for those who initiated it.

That would probably be the case if Parliament did not pass a counter-proposal that would allow the initiative to be withdrawn and it then failed at the ballot box. This outcome would hardly contribute to the fact that Parliament will dare to take a particularly large step in the next AHV reform when it comes to retirement age.

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