Background to the reform
The OASI is the centrepiece of the Swiss social security system and plays a decisive role in ensuring the standard of living in old age. In view of increasing life expectancy and the falling birth rate, the AHV is under pressure. Reforms are necessary in order to secure long-term funding and offer future generations an adequate pension scheme.
Key changes
Raising the retirement age for women
- The normal retirement age for women will be gradually increased from 64 to 65. From 2025, retirement for women born in 1961 will be postponed by 3 months. Those born in 1964 will then be the first to retire at 65 after a further three months. From 2028, the same retirement age of 65 will apply for women as for men.
- For those born in the 1961-1969 transition generation, there will be financial compensation for the higher retirement age, either in the form of a lifelong supplement to the AHV pension or as an early withdrawal, which corresponds to early retirement and is accompanied by a reduction in pensions. In both cases, lower incomes are favoured:
- Women from the transitional generation who work until the new retirement age applicable to them receive a lifelong supplement to their AHV pension (depending on their income and year of birth), which is then not subject to the cap for married couples.
Flexible pension drawdown
- Both men and women can now draw their first AHV pension flexibly between 63 and 70 (women of the transitional generation from 62). This flexibility should allow people to adapt their retirement to their personal life situation and financial needs. In addition, you can now draw your pension in stages, namely 20 to 80 per cent initially and defer the rest to ease the transition to retirement.
- Previously, those who continued to work and pay contributions after the reference age could not improve their retirement pension. It is now possible to take income and contribution periods earned after the reference age into account when recalculating the pension if the maximum pension is not reached or if there is an entitlement to a partial pension due to a contribution gap.
Additional financing through the increase in VAT
- The funds raised from the increase in VAT by 0.4% for the standard rate and 0.1% for the reduced rate will be used to provide additional funding for the AHV.
Effects of the AHV reform on the population
- Financial planning: the adjustments require an early rethink of old-age provision and financial planning for retirement
- Career prospects: older workers may have to or be able to remain in the labour market for longer, which changes the dynamics in the world of work.
- Social security: Improved benefits for low earners help to strengthen social security for vulnerable groups.
Overall assessment of the impact on women
Overall, the AHV reform offers both challenges and opportunities for women. While the increase in the retirement age and the necessity/possibility of working longer can be a burden, the flexibilisation of retirement and the improved benefits for low-income earners open up new prospects. Thanks to the reform, contribution gaps can still be partially filled.
However, it is now all the more important that women take an early and active look at their pension provision and review both the first and second pillars and, if necessary, utilise the new regulations to strengthen their financial security in old age.
Image sources: cover picture: UNSPLASH, photographer: Juani Sanchez