EVELINE RUTZ December will see the first 13th state pension (OASI) payments being made to all eligible recipients in Switzerland and abroad. The total outlay will be around 4.2 billion Swiss francs, but demographic changes mean this sum will likely rise to 5.4 billion francs by 2040. The number of pensioners increases every year. At the end of 2025, 2,635,200 people – one third of whom live abroad – were receiving OASI benefits. The figure is likely to be about three million in 10 years’ time. Costs will also increase, because pensions are regularly adjusted in line with inflation and wages. Yet it is still unclear how the increased pension payments will be funded. The trade unions may have scored an historic victory at the polls in 2024 with their idea of a 13th state pension payment (see “Swiss Review” 3/2024), but they never addressed the financial side. Unsurprisingly, subsequent debates in parliament have been protracted and heated. Referendum looms on VAT hike to fund the state pension system Following heated debate, parliament has decided to increase VAT to 8.5 percent as a means of partially funding the 13th state pension payment without the working population having to pick up the tab directly. Voters will now be asked for their opinion on 29 November 2026. How to cover the expense? Increase pension contributions? Raise taxes? Redistribute revenue? Whatever the answer, parliamentarians from all parties wanted the result of the 2024 vote to be implemented quickly. Voters treating themselves to an additional OASI payment now had to pay for it, noted conservative politicians dryly. As the Centre Party National Councillor Thomas Rechsteiner put it: “Those saying yes to the 13th payment need to realise that it won’t come free.” The question of whether measures to help fund the payment should be temporary or permanent was another sticking point. A time-limited solution would have made the need for structural reforms even more pressing. Around 2.6 million people were receiving OASI benefits at the end of 2025. The figure is likely to be 3 million in 10 years’ time. Shopping bills are set to rise – meaning all sections of the population will help to fund the 13th state pension payment. Photo: Alexander Faé, Unsplash Swiss Review / October 2026 / No. 4 8 Politics
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