Baume-Schneider faces criticism over 13th pension funding

Swiss Federal Councillor Elisabeth Baume-Schneider faced sustained criticism over plans to fund the country’s 13th state pension payment in a televised debate, SRF reported. The government and parliament want to raise the standard value-added tax rate by 0.4 percentage points.

The first 13th pension payment is due in December 2026. It is expected to cost more than 4 billion francs initially and more than 5 billion francs in later years. The federal government says the tax increase, together with its contribution, would cover about half of the additional costs.

Baume-Schneider said voters had clearly approved the 13th pension in March 2024 and that the government had made clear it would come at a cost. She argued that the pension was important and reflected the country’s commitment to looking after everyone.

FDP co-president Susanne Vincenz-Stauffacher opposed raising taxes on households and businesses. She said the pension could instead be funded from existing tax revenue by freeing up money in the federal budget and introducing a structural measure.

Daniel Lampart, chief economist of the Swiss Trade Union Federation, said the issue was the stability of the pension system. He argued that structural measures, as proposed by the FDP, would effectively mean raising the retirement age. According to his calculations, an office worker would have to work until 68 or 69 to cover the cost of the 13th payment, which he called unrealistic.

Swiss People’s Party president Marcel Dettling said the proposed funding plan was not a social compromise. He opposed raising the retirement age and said a model based on a person’s total years in work could be an alternative: those who start working later could work longer.

Urs Furrer, director of the Swiss Trade Association, also opposed the tax increase, saying a permanent rise would burden businesses and customers. Centre Party senator Erich Ettlin argued that delaying action would be irresponsible and said a solution was needed now to ensure the pension system’s security.

The positions were aired on SRF’s Arena programme on November 11.