The 13th OASI pension divides the Swiss People's Party

The Swiss People's Party is fighting the OASI initiative of the trade unions. However, the party is divided on the matter. Especially in French-speaking Switzerland and in Ticino. The vote could be decided along the language border and break the classic left-right pattern.   

Claire Micallef

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It was the first surprise for the vote on March 3, 2024. Shortly before Christmas, the Geneva section of the Swiss People's Party decided to support the initiative that calls for the introduction of a 13th OASI pension payment.

The decision was made after an “engaged discussion”, explains the new party president Lionel Dugerdil, who recently took over the presidency from his predecessor Céline Amaudruz. “We have pensioners in Geneva who can barely make ends meet at the end of the month.” This yes is to be seen as a signal for the purchasing power of senior citizens, says Lionel Dugerdil. “Geneva is expensive. The cost of living here is significantly higher than elsewhere in Switzerland."

A 13th OASI pension payment would cost around CHF4.1 billion when it is introduced, and even more in the following years as society is getting older. Sooner or later, it will probably need additional revenue. With the 13th OASI pension payment, the maximum annual pension will increase by CHF2,450 for individuals and by CHF3,675 for married couples. The supplementary benefits should not be reduced because of the 13th monthly pension payment.

The national Swiss People's Party will decide on its voting recommendation at the delegates' meeting on January 27. However, the parliamentary group of the Swiss People's Party has already clearly spoken out against the initiative.

Divided opinions in the Swiss People's Party

And yet, the initiative, which was launched by left-wing and trade union circles, enjoys sympathies among the Swiss People's Party delegates. There are also supporters of the initiative in Valais. Thus, the Swiss People's Party in Lower Valais has decided to give their members the freedom to vote as they wish on this issue.

The debate was also passionate at the delegates’ meeting of the Swiss People's Party of Vaud. Although the vaudois Swiss People's Party rejected the initiative, the discussion in the room was heated. “We must prove that we stand up for our senior citizens and their purchasing power. That’s why we have to say yes to the initiative,” a young delegate called out during the debate. Too dangerous and expensive, the opponents countered.

The Swiss People's Party in the canton of Ticino is also considering voting yes. According to Ticino correspondent Marcel Niedermann, this position is linked to the high rate of poverty among the elderly and wages, which are under pressure due to cross-border commuters. In addition, the Lega, the sister party of the Swiss People's Party in Ticino, is already in favour of the initiative. The situation is similar in the canton of Jura, where there could also be support for the initiative, says the national correspondent Rolf Dietrich.

The position of the Swiss People's Party – whether in favour of or rejecting the initiative – could therefore be decided along the language borders. Which direction the initiative takes and what role the Rösti- and Polentagraben ("Rösti and Polenta divide") play will be revealed on March 3rd.   

Divided opinions within the Swiss People's Party

Do the right people benefit from the 13th pension?

Thousands of retired Swiss seniors falling into poverty 

In Switzerland a huge wealth gap exists among retirees. While most senior citizens can comfortably make ends meet, one in five is living either below or close to the poverty line. Some 50,000 pensioners have no financial cushion to offset their low income.

Bernard and Pierrette Apothéloz are both in their early 70s. With their meagre pensions and no savings or additional benefits, the couple often struggle to pay their bills. Because of their financial situation, they are unable to absorb any unforeseen costs.

“Just keeping our heads above water is a constant battle,” says the husband. They are “very stressed” about money. In recent years, they have watched the rising costs of health care and most basic commodities with consternation.

We meet the couple in their small flat in Neuchâtel, a town in the French speaking part of Switzerland, during a visit by a social worker from Pro Senectute. This organisation, which defends the rights, dignity and wellbeing of the elderly, offers social counselling and assistance to those in financial difficulty.

In the five years since they took their retirement, Bernard and Pierrette have had to face unpayable bills for dental care as well as the dilemma of how to put food on the table.

“It was the end of the month and we hadn’t even got CHF20 ($22) left for the weekly shopping,” Pierrette recalls. “Even going down just to the bare basics, we have to count every penny.”

The couple have eliminated most non-essential expenses. “I can no longer buy any presents for my wife,” Bernard laments. He has curtailed his leisure activities, bar the weekly card club and “an occasional coffee or beer”. If he goes into town, it is always on foot. His wife, meanwhile, has cut back on everything except cigarettes. The couple feel increasingly isolated – inviting friends around has become too expensive, but they avoid it “perhaps also out of a feeling of shame” vis-à-vis their better-off peers.

Like this Neuchâtel couple, nearly 9% of the over-65s say they have great difficulty making ends meet, according to the Federal Statistical Office.

A study commissioned by Pro Senectute found that over 200,000 retired people (the equivalent of nearly 14% of retirees, compared to 6% of the working population) are living on an income below the poverty line, and a further 100,000 are close to it. A total of one in five senior citizens can be considered poor or at risk of falling into poverty.

Women, people with a low level of education, and foreigners are at greater risk than the rest of the population – that is, anyone likely to have had a low-income job or fragmented career, which is then reflected in a very low pension, explains Rainer Gabriel, a researcher at the Institute of Diversity and Social Integration at the Zurich University of Applied Sciences (ZHAW).

Before retiring, Bernard Apothéloz took inventories for retail kiosks. He earned around CHF4,800 a month – not enough to put money aside (the current median salary in Switzerland is about CHF6,700) but sufficient “never to get into debt”. Today, he and his wife are living on CHF4,800 a month.

The household income consists of their state pensions and the husband’s occupational pension. Pierrette also worked, but not continuously. She took a break of several years to raise her son and was forced into early retirement at 62 after being made redundant. As a result, she only has a partial state pension. Meanwhile, her occupational pension, which she chose to withdraw in full when she retired, quickly melted away. At the time she needed it, but now she regrets that she made “a huge mistake”.

Although they share the average amount received by a single person with a state and occupational pension, the couple is still far from the poverty line, which stands at CHF3,064 a month for a household of two adults without children – a threshold considered too low by the anti-poverty organisation Caritas.

Not all pensioners have assets to dip into

The precarious reality of some pensioners is easily overshadowed by the generally sound financial situation of most older citizens in Switzerland. The Swiss pension system is mostly considered to be effective at preventing poverty in old age, as the researcher Gabriel notes. Thus, the material-deprivation rate of the over-65s in Switzerland is one of the lowest in Europe – and half that of the 18–64 age group.

Retired people have tended to acquire savings and assets throughout their working lives. “It is therefore commonly assumed that it does not matter if they have a low income, as they have real estate to sell or savings with which to compensate,” Gabriel explains. Indeed, statistically, this age group does have the greatest concentration of wealth. A good half of over-65s own more than CHF100,000 in so-called liquid assets – that is, assets that can be mobilised in the short term. This is also true of 40% of pensioners whose income is below the poverty line.

But, as the ZHAW researcher points out, individual situations differ greatly. Firstly, assets are not always liquid. Real estate is a case in point. In addition to the upheaval of moving house at an advanced age, selling one’s property to go and live in rented accommodation is not necessarily wise, given the steep rental prices.

But above all, a considerable segment of the retired population simply does not have the means to compensate for their low income. According to the statistics office, almost 16% of the over-65s have no substantial financial reserves, and 11% would be unable to cover an unforeseen expense of CHF2,000. The Pro Senectute study conservatively estimates that at least 46,000 people are in “dead-end poverty”, with no savings or assets of any kind.

In general, Gabriel concludes, senior citizens have fewer coping mechanisms than the active population – the first being work. This is why poverty is much more insidious in old age.

Translated from French by Julia Bassam/gw

Thousands of pensioners at risk of poverty

Always the same arguments – Catholic resistance against the OASI

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Different times, same arguments

Find out where you stand

Women and pensions. Two solutions, but which one is better?

With the OASI reform, the transition generations can stop working at the reference age or earlier, but with a financial reduction.

Simone Fassora

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The OASI reform, accepted in a popular vote in 2022, came into effect at the beginning of the year. The most controversial point was the increase from 64 to 65 years in the retirement age for women. Now many people are wondering how this change will take place and what it means for women approaching retirement age in these years.

Working an extra year. With the OASI reform, retirement moved further into the future for many women. The application of the new rules will take place gradually, as explained by Simon Tellenbach of the consulting company VZ Vermögenszentrum. “Women who turn 64 this year are not affected. The reference age for retirement will be raised by three months each year starting in from 2025." This means that women born in 1960 still retire at 64. The increase will then occur in stages, and starting with the women born in 1964, the reference age for retirement will be 65 years old.

“Women of the transition generations have two options. Either they retire according to the reference age and get  a supplement to their pension, or they retire earlier, but with a reduction,” Tellenbach points out. In practice, in the coming years women either work until regular retirement, receiving a higher pension, or they can choose to retire at 64, but with a reduced pension.

Another novelty. With the reform coming into effect, the retirement age becomes flexible for both sexes. The idea is to make working beyond 65 more attractive. Between the ages of 63 and 70, it will be possible to receive only a part of the pension. A person could therefore, for example, work full-time until 65, work 50% in the following two years and receive half of the OASI, then move on to 20%, and finally retire at 69.   

“Regarding the OASI, deciding to work longer can have its advantages, especially if you have gaps in your contributions or you have not yet reached your maximum pension. This is because now, the contributions paid after the reference age increase the pensions.”

With this more flexible system, how many people will decide to work beyond 65? Time will tell in the coming years. 

Women and pensions: two solutions

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