Swiss voters back pensions boost amid high cost of living

The proposal to introduce a 13th annual payout to pensioners was supported by 58.2% of the electorate and also met the additional requirement of being passed in the majority of Switzerland’s cantons. A second initiative to raise the retirement age — and subsequently tie it to life expectancy — was rejected, garnering only 25.3% of votes.

Polls ahead of Sunday had suggested that passing the measure that boosts pensions by about 8% would be a close call. Since 1848, Swiss voters had never approved plans to boost social benefits paid out by the state. The initiative was introduced by labor unions, who said higher costs of living had diminished pensions’ purchasing power.

The approval is a “watershed moment for Switzerland,” according to political analyst Georg Lutz. “Just ten years ago, with bourgeois parties and business associations against it, such a proposal would have been without any chance,” he told Bloomberg ahead of the vote.

The government-orchestrated rescue of Credit Suisse last year may have favored the result, according to Michael Hermann, head of pollster Sotomo.

“Many think that the entrepreneurs and managers have broken the unwritten Swiss social contract: That managers are modest with bonuses and debauchery and the people are modest with social demands,” he told newspaper SonntagsZeitung. “People have been angry for a long time about the behavior of corporations, managers, tax evaders. So you often hear now: ‘If they help themselves, then we also want something for us’.”

Pensions will be increased from 2026, according to the text of the initiative. The proponents didn’t provide a plan to fund the estimated additional annual cost of 4.1 billion Swiss francs ($4.7 billion), so the vote is set to send the government — which had recommended its rejection — scrambling to find the money.

Finance Minister Karin Keller-Sutter has said that since Switzerland is already running a budget deficit, the approval will likely require an increase of value-added tax.

“This is a dark day for young generations,” lawmaker Christian Wasserfallen of center-right FDP said in a post on X. “I’m proud of all the young who are committed to secure pensions. Today we lost.”

FDP — Keller-Sutter’s party — will reject any tax hikes for businesses to fund the higher pensions, unless they are tied to structural reforms saving money, the group said in an emailed statement.

The pensions boost saw particularly strong backing in French- and Italian-speaking cantons, while voters in the bigger German-speaking part were more skeptical, according to government data. Turnout across the country topped 58%.

“The population showed that it really cares about the matter,” Interior Minister Elisabeth Baume-Schneider told reporters in Bern, rejecting the suggestion of a so-called “Rösti trench.”