Swiss vote on plan to save pensions

GENEVA: Switzerland votes yesterday on a divisive pension reform plan the government says is vital to safeguard benefits but which critics deride as too modest to rescue a retirement system in financial peril.

The key measures, approved by parliament in April, include raising the women’s retirement age by a year to 65, putting it in line with men, as well as a consumption tax ( VAT) increase to help fund benefits.

Proponents say those steps would help avert deficits in a social security scheme facing pressure from an ageing population, with baby boomers entering retirement.

Rising life expectancy, now at 83 years in Switzerland, has added further strain.

The reform proposal, which is backed by leftwing and centrist parties, also includes more retirement age flexibility and increased contributions from employers and workers.

The plan, officially known as Pension Reform 2020, will only come into force if voters also approve the corresponding VAT increase.

The vote is the latest in Switzerland’s direct democracy system, which includes four referenda per year on major national issues.

The latest polls indicate the result is too close to call, with the pro-reform side slipping marginally in recent in weeks.

Support for the plan stood at 53 percent in mid-August, but had fallen to 51 percent days ahead of the vote, while just 50 percent of respondents said they now backed the VAT increase. — AFP