Swiss MP proposes scheme contributions to fund 13th month of pension | News

Jacqueline Badran, member of the National Council, the lower house of the Swiss Parliament, for the Social Democratic Party (SP), has proposed to finance the 13th month of pension – which was recently approved in a referendum – with contributions paid by members to Pensionskassen.

According to the member of parliament (MP), in the future 1% less contributions will flow to pension funds, and 0.8% more to the first pillar AHV.

“That would mean that pensions would increase for most people. It brings a lot to most people – and it is cost-neutral,” said Badran.

Swiss savers voted on 3 March in favour of paying out a 13th month of pension from the first pillar pension system – 13. AHV-Rente – from 2026. The Social Democratic Party campaigned to increase annual first pillar pensions, alongside the Greens and workers’ unions.

Conservative Swiss People’s Party (SVP), the liberal party FDP,  The Centre (Die Mitte) party, and the Green Liberal Party of Switzerland (GLP), supported instead a more targeted increase of first pillar pensions, only for pensioners who really need an increase.

The vote on the 13th month of pension has triggered a debate on how to finance the measure, that could end up costing CHF5bn (€5.2bn), with Badran’s proposal seen as a way to weaken the second pillar pension system.

Peter Hegglin, member of the Council of States, the upper house of the Swiss Parliament, for Die Mitte party, has rejected the idea of giving “access to private funds”. “It would be more honest to increase wage deductions for the AHV.”

Members of Die Mitte are considering the introduction of a tax on financial transactions to finance the 13. AHV-Rente.

Felix Wettstein, an MP for the Green Party, had also submitted a motion calling for a “micro transaction tax”, of for example 0.1 per mille.

Representatives of the SVP,  FDP and the Green Liberals reject the idea of a tax on financial transactions that could potentially have a negative impact on Switzerland as a  financial center, and on the economy as a whole, reports added.

The FDP has instead in mind to increase the retirement age to finance the 13th month of pension, an option rejected in another referendum on 3 March.

Other options on the table include increasing contributions from employers and employees’ wages, or a higher VAT rate.

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