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Instead of age, the number of years of employment should become the criterion for the regular retirement age. This is what the Center Employers in western Switzerland suggests. Such a system change would not change the basic political problem of service provision for old age.
Those who start working at the age of 18 should be able to retire earlier: construction workers lay a floor on a construction site in Basel.
Arithmetic is unpopular in federal politics when it comes to pension provision. Therefore, even banalities must be remembered often. For example: if life expectancy is continually increasing, but working hours are not increasing, AHV’s finances are not sustainable without fantastic economic growth. And: A renewal cannot prevent a menu selection from higher retirement age / higher salary deductions / lower annual pensions / higher use of taxpayer money. And a third banality: the more the old-age provision is restructured by increasing income instead of reducing spending, the stronger is the tendency to redistribute from young to old and from top to bottom. The rest is fine print.
The Center Patronal, the service center of the Vaudois employers’ association, also rubs itself against these banalities. The Employers’ Center has in mind a reform model for the old-age benefit: instead of the fixed age, the number of years of professional life should be the central criterion for the regular retirement age. The central consideration of the idea that has already been expressed: anyone who starts working at age 18 should be able to retire earlier without any disadvantage than the academic who, for example, only gets a full job from the age of 25. One consideration Key behind it: people with a longer training tend to have a less physically demanding job and a longer life expectancy.
Now to the essentials
The crux of such reform is obvious: How many years of work does it take for a proper retirement? The Employer Center provides for a normal working life of 44 years, with years of employment from 18 to 21 years of age only credited with an annual income of CHF 34,128 (120% of AHV’s maximum pension). So if you earn at least the same amount before 21, you could retire before 65, at best 62. Apprentices earn significantly less than the mentioned threshold during their apprenticeship, but under certain circumstances, of According to the basic model of the proposal, apprenticeship graduates could earn 63 or 64 to retire. This is so despite the fact that many intern graduates complete higher education and earn high incomes.
The Employers’ Center had economics professor Christoph Schaltegger and Patrick Eugster from the University of Lucerne calculate what the matter would mean financially. In their article, the authors confirm the obvious assumption: the basic model of the reform proposal would not lead to restructuring of old-age service provision, but it would be even more costly in the end result. There are estimation uncertainties here, especially with the assumptions about the proportion of people who already exceed the mentioned income threshold before age 21. But it is obvious that the basic model would not be sustainable without a correction for the provision of old age services.
For a “sustainable” scenario for the AHV, the Employers’ Center suggests that the financial gaps are filled from three sources: an increase in VAT (half of the gap), an increase in salary deductions (a quarter of the gap) and, beginning in 2027, an increase in the required number of Contribution Years (one quarter). By definition, this would result in balanced AHV bills. But three-quarters of the gap would be covered with additional income and only a quarter would come from the extension of the working day. Therefore, the distribution appears one-sided, even without taking into account the fact that the most recent restructuring contribution to AHV only came from additional revenue. According to calculations by the Lucerne researchers, VAT should be increased in three steps by a total of 1.9 percentage points by 2035, and salary contributions should increase by a total of 0.75 percentage points by 2043. Working hours would increase from 44 years to 45 years and 7 months by 2045.
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According to the authors of the Lucerne study, “from an economic and sustainable perspective, it would make more sense if working life were increased more in favor of VAT and wage deductions.” Because “higher taxes reduce the willingness to consume and innovate and thus weaken the economy and therefore also the AHV in the long run.”
The mechanics of the second pillar are slightly different, but the fundamental principles of the old-age benefit also apply. According to the authors of the Lucerne study, it would be welcome if politicians explained the matter openly to the population instead of talking about the bush: “The pension promises are too high, the capital saved is too low. We can only achieve a real and sustainable solution if we reduce our pensions or work more. ”Another banality that few people want to hear in the Bundesbern.
