Swiss Review 4/2022

Different approaches to reforming the state pension Since 2014, the state pension fund has been paying out more money than it receives. The OASI 21 reform package is the Federal Council and parliament's attempt to balance OASI expenditure and revenue and secure the level of retirement benefits in Switzerland by increasing VAT by 0.4 per cent and raising the retirement age for women from 64 to 65. Under OASI 21, the decision as to when to draw a pension is also more flexible. Both men and women can draw their pension from the age of 63 at the earliest or defer it until they are 70 at the latest. Gradual pension withdrawal is also possible. Working beyond the reference age of 65 can increase a person’s pension amount, thereby providing an incentive to work longer. The initiative championed by the Young Liberals (“Making the retirement age more flexible”) calls for the retirement age for men and women to be raised to 66 – and increased further thereafter, in line with life expectancy. It proposes developing occupation-related, flexible solutions and pension models for people unable to work up to the age of 66. Trade unions and left-wing political parties have submitted the “For a better life in retirement” initiative, in which they call for a 13th OASI pension payment to be made to all pension recipients, without this having a detrimental effect on the level of, and entitlement to, supplementary benefits. Trade unions and the SP have now gone one step further and presented an additional proposal that involves using a proportion of Swiss National Bank (SNB) profits to shore up the pension system. Their popular initiative is called “SNB profits for a strong OASI”. (DLA) Overview of all federal votes on 25 September 2022 Popular initiative to end factory farming According to this popular initiative, the constitution must protect the dignity of animals within the animal husbandry industry, and intensive, large-scale livestock farming must be banned. The animal and environmental protection groups tabling the initiative want to end the factory farming of hens, pigs and cows, with the federal government defining criteria for animal-friendly housing, access to outside areas, and slaughter. But opponents believe the initiative is a waste of time. Farmers already take care of their livestock, while Switzerland’s Animal Welfare Act is stringent enough, they say. More on pages 26–27. OASI reform package – containing two proposals To future-proof the finances of the old-age and survivors’ insurance scheme (OASI), the Federal Council and parliament want to raise the female retirement age from 64 to 65. Women born between 1960 and 1968, whom the consequences of this age hike would hit the most, would receive supplementary pension benefits as compensation. To fund these offsetting payments, the government would increase VAT by 0.4 per cent from its current level of 7.7 per cent. Voters will decide on two items: a change in OASI legislation in order to raise the female retirement age, and a federal decree on additional funding that entails an increase in VAT. Trade unions and left-wing political parties oppose the reform package. They say that women will bear the brunt of the proposals, and warn of further plans to dismantle pension provision. More on pages 13–15. Partial abolition of withholding tax By changing the Withholding Tax Act, the Federal Council and parliament wish to strengthen the debt capital market and improve Switzerland’s competitiveness. Specifically, this would involve abolishing withholding tax on interest income from Swiss bonds. The so-called Swiss transfer stamp duty would also no longer apply to Swiss bonds. The SP, the Greens and trade unions oppose the plan, which would result in an annual tax shortfall of several hundreds of millions of Swiss francs. They argue that only wealthy investors will benefit from the tax relief, which gives carte blanche to potential tax evaders. (TP) remark could easily have come from the opposing side. Depending on your political affiliation, possible remedies include working longer, drawing lower pensions, paying higher salary contributions, raising VAT, funnelling inheritance tax into the state pension scheme, or a combination of the above. Or we can fund OASI using money from the Swiss National Bank, say the SP and trade unions as part an additional popular initiative currently in the pipeline. Looking ahead to the autumn vote, the future outcome remains unclear. OASI is still a work in progress. DENISE LACHAT IS A FREELANCE JOURNALIST BASED IN MORGES (CANTON OF VAUD) Swiss Review / August 2022 / No.4 15