On 3 March 2024, Swiss voters decided in favour of a 13th Old-Age and Survivors’ Insurance (OASI) payment per year, but against gradually raising the statutory retirement age. For the first time in the system of the Swiss direct democracy, a popular initiative to expand the welfare state was adopted.

In the Swiss system of direct democracy, the Swiss Federal Constitution can be changed, among others, through popular initiatives. In Swiss terminology, this is distinguished from referenda, which concern decisions by the Swiss Federal Assembly, i.e. the Federal Parliament. In order to be put to vote, a popular initiative requires the signatures of 100,000 voters within a collection period of 18 months. To pass, the initiative must reach a double majority, i.e. the majority of the voting population and the majority of the Cantons (i.e. the federal sub-states: Cantons where a majority of the people voted yes will be counted as a yes on the cantonal level as well; and vice versa). If it succeeds, an initiative immediately changes the text of the Federal Constitution. Thereafter, it must be implemented at the federal legislation level.

On 3 March 2024, two popular initiatives related to the Swiss state system of old age pensions under the OASI system were voted on. The first was the popular initiative “For a secure and sustainable pension scheme (pension initiative)” launched by the Young Liberals, a branch of the Swiss Liberal Party, who argued that the OASI lacks money. To secure the financing of the OASI in the long term, it proposed to gradually raise the retirement age to 66 from 2028 to 2033. Thereafter, the retirement age would continue to rise automatically as average life expectancy increases. According to forecasts, under this system the retirement age would have reached 67 years in about 20 years from now (see the official information on the initiative by the Swiss Federal Government, p. 22 – available in the German, French and Italian languages only). The Pension Initiative was roundly rejected by 74.74 % of the people’s votes and by all 26 Cantons.

In contrast, the popular initiative “For a better life in old age (initiative for a 13th OASI pension)” was accepted by 58.24% of the people’s votes and by 16 out of 26 Cantons. The aim of this initiative, launched by a left alliance under the guidance of trade unions, is to increase the yearly OASI retirement pensions by one month’s worth. As a result of the vote, the maximum annual retirement pension will be increased by 2,450 Swiss Frances (CHF) to 31,850 CHF for individuals per year, and by 3,675 CHF to 47,775 CHF for married couples.

Art. 111 of the Swiss Federal Constitution refers to the Swiss three-pillar system for old age provision, consisting of 1) the OASI as the statutory pension, 2) an occupational pension, and 3) private old age provision schemes such as personal savings. In this framework, the OASI is in principle intended to provide adequate cover for basic needs in old age. However, whilst the monthly maximum amount of 2,450 CHF may sound generous from an outside perspective, it will not be sufficient in an expensive country such as Switzerland, where even just the compulsory health insurance costs several hundred CHF per month per person, and where the cost of living is generally very high. Against this background, the architects of the initiative for a 13^th OASI Pension argued that, over the last three years, inflation and the rise in the compulsory health insurance premiums together have amounted to as much as one month’s pension, which means that old people in old age have in fact lost this pension.

Commentators have argued that rising costs and a simple idea were convincing factors for voters to support this initiative, even in conservative circles. Most likely, it also helped that the text of the initiative left the question of funding of the scheme open. That unenviable task that is now left to the Swiss Federal Assembly. It will not be easy in a situation where, in the last years, the Swiss Federal State has produced a deficit. Due to a number of reforms – among which raising the pension age for women – the OASI is currently well funded and has reserves, but OASI deficits are expected by about 2030, even without the 13th OASI pension payment. This means that extra money will have to be found elsewhere, and it will take ingenuity to ensure that this will not burden disproportionately precisely those with little income.