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The massive yes to the 13th AHV pension is, according to the media, “a historic moment”, “a turning point”, “a socio-political sensation”. For the first time, voters have approved an initiative to expand the welfare state. Paul Rechsteiner (71) is the architect of the AHV expansion. On voting Sunday he was celebrated in Bern as the ‘real father’ of the AHV initiative. The ex-chairman of the Swiss Federation of Trade Unions and former SP politician presents the “Observer” with a surprising financing plan for the 13th AHV pension.
This article was first published in the “Observer”. You can find more exciting articles at www.beobachter.ch.
This article was first published in the “Observer”. You can find more exciting articles at www.beobachter.ch.
Mr Rechsteiner, you are the inventor of the 13th AHV pension. How did you experience voting Sunday?
Lower and middle income people have been waiting for this day for a long time. It was a big day for Switzerland and for its main social security system, the AHV. The voting victory shows that the population thinks differently than the politicians in the Federal Parliament.
Some blame the supposedly selfish Boomers for the yes vote and complain that the elderly have drowned out the young at the ballot box.
It is completely clear that the decision depends on the social class. This is evident from the studies. Low and middle income groups were strongly in favor, but for monthly incomes above 13,000 francs there was a majority against it. In some cases, cities voted less clearly than rural communities. Because many high earners also live in cities. And anyone who pits generations against each other is playing a bad game. Young people are also getting older and are dependent on a strong AHV.
Your opponents say that the AHV is running out of money. How should the 13th AHV pension be financed?
Good AHV benefits are worth something to the population. No direct financing is needed because the AHV is doing very well thanks to the additional financing in recent years. In the medium term, however, the AHV needs more money. Additional funding could be added in coming years without putting an additional burden on people.
Like that?
If unemployment figures do not suddenly rise sharply, wage premiums for unemployment benefits could be reduced by 0.3 wage percentage points. Employees and employers would then each have to pay 0.15 percent less. Because unemployment insurance brings in much more than it spends. The federal government could redistribute 0.3 wage percentage points so that they would go to the AHV. That would instantly generate an additional income of 1.3 billion francs. It would be a blessed story for everyone, because no one would have to pay more than they do now.
That’s enough?
In addition, accident insurance premiums are falling because fewer accidents occur. Therefore, wage contributions for accident insurance will also decrease. And because we are having fewer children, family benefits are also decreasing. The trade union federation has calculated that wage contributions to social insurance will generally fall so sharply that people will not even notice the higher AHV premiums in their wallets.
In 2016 you failed with a similar initiative. Why did the electorate say yes?
The financial situation of many people has deteriorated due to rising rents and healthcare premiums. At the same time, the pensions of pension funds have become worse. And our question was better formulated. The 13th pension is just as obvious as the 13th monthly salary. Everyone knows what it’s about.
The strong yes came as a surprise. How could Parliament have so misjudged the vote?
Economic and wage developments in Switzerland are positive. It is incomprehensible that pension incomes continue to deteriorate while the cost of living rises. The promise from the constitution that people can live decently in their old age on pensions from the AHV and the pension fund was increasingly not fulfilled. The voting results are proof of this.
Unemployment insurance is worth billions: is the asset brake coming now?
There is a capital brake on unemployment insurance. As soon as the insurer has too much on its plate, it must reduce wage contributions, the State Secretariat of Economic Affairs (Seco) confirms. In 2022, unemployment insurance generated 2.3 billion francs more than was spent. The annual report shows this. According to a projection by Seco, equity at the end of 2023 amounted to no less than 6.8 billion francs. Within a year, shareholders’ equity increased by 2.8 billion francs. According to Seco, the share limit last year was 11 billion francs. This means: in about two years, the Federal Council will probably have to reduce wage deductions if the economy remains stable. In 2011, the federal government increased wage contributions for unemployment insurance from 2 percent to 2.2 percent. Employees and employers each pay half of this.
Source:Blick
I am Liam Livingstone and I work in a news website. My main job is to write articles for the 24 Instant News. My specialty is covering politics and current affairs, which I’m passionate about. I have worked in this field for more than 5 years now and it’s been an amazing journey. With each passing day, my knowledge increases as well as my experience of the world we live in today.
