Swiss Voters Make History, Approve Landmark Increase in Pensions via Plebiscite

In a historic move, Swiss voters have endorsed a proposal to raise pensions, marking the first time in the nation’s history that social benefits have been increased through a plebiscite. The groundbreaking initiative, which introduces a 13th annual payout to pensioners, secured the support of 58.2% of the electorate and achieved the additional milestone of being passed in the majority of Switzerland’s cantons.

The approved plan, advocating an approximately 8% boost in pensions, was initially anticipated to be a close call according to pre-vote polls. The decision is a significant departure from the longstanding trend, as Swiss voters had never sanctioned plans to enhance social benefits provided by the state since the inception of the country in 1848. The proposal was put forth by labor unions, citing the diminishing purchasing power of pensions due to rising living costs.

Political analyst Georg Lutz characterized this approval as a “watershed moment for Switzerland,” highlighting the remarkable shift in public sentiment. A decade ago, such a proposal would have been deemed implausible with opposition from bourgeois parties and business associations, as reported by Bloomberg.

The recent government-led rescue of Credit Suisse in 2023 is believed by some, including Michael Hermann, head of the pollster Sotomo, to have influenced the outcome. Hermann suggests that public frustration with corporate behavior, including excessive bonuses and tax evasion, may have played a role in the voters’ decision to demand improved social benefits.

The initiative mandates an increase in pensions starting from 2026, without a specified plan to cover the estimated additional annual cost of 4.1 billion Swiss francs ($4.7 billion). The unexpected approval puts pressure on the government, which had recommended rejection, to find the necessary funding. Finance Minister Karin Keller-Sutter indicates that, given Switzerland’s existing budget deficit, an increase in value-added tax is likely to be considered.

While supporters celebrate this victory for pensioners, concerns are raised among critics, including lawmaker Christian Wasserfallen, who describes it as a “dark day for young generations.” The Free Democratic Party (FDP), to which Keller-Sutter belongs, asserts that they will reject any tax hikes for businesses unless tied to cost-saving structural reforms.

The geographical breakdown of the vote reveals strong support in French- and Italian-speaking cantons, while skepticism is more pronounced in the larger German-speaking regions. With a nationwide turnout exceeding 58%, Interior Minister Elisabeth Baume-Schneider emphasizes the population’s genuine concern about the matter and dismisses the notion of a divisive “Rösti trench.”

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