ZURICH (Reuters/AFP) – Switzerland voted decisively to increase pension payments for the elderly in a referendum on Sunday, as concern over living costs and support for a stronger social safety net trumped questions about how to afford it.
Simultaneously, a separate vote to raise Switzerland's retirement age to 66 from 65 was soundly rejected by three-quarters of voters.
Provisional official results published by the government showed over 58 per cent of voters backed the extra pension, a 13th monthly payment per year, with less than 42pc against, a more emphatic victory than final polls had suggested.
The measure, which was promoted by the Swiss Trade Union Federation and left-of-centre parties, also needed the backing of a majority of Switzerland's 26 cantons to pass. Most supported it, with opposition strongest in lower-tax cantons.
"This step is really a huge milestone from a union perspective," Lukas Golder of polling firm gfs.bern told SRF.
"This is historic," Pierre-Yves Maillard, head of the Swiss Trade Union Federation (SGB), told AFP, as Greens Party celebrated a "significant victory... for the many retirees who will see their situations improve".
The government, business lobbies and parliament, which currently leans to the right, had rejected the proposal as financially unsound. Swiss voters have in the past been cautious about backing measures viewed as risky for business.
Read more: Swiss vote on retirement age increase, pension hike
The pension vote contrasts with referenda in recent decades in which Switzerland clearly rejected proposals that would have shortened the working week and given people more holidays.
Concern about the cost of living is widespread in the wealthy country. Zurich, Switzerland's biggest conurbation, tied with Singapore as the world's most expensive city in a study published in November by the Economist Intelligence Unit. Mery, a 65-year-old Zurich voter, said increased pension payments made sense.
"I'm retired now and so obviously I would like a bit more," she said, declining to give her full name. "It should allow me to give a little something to my grandchildren."
It is not clear how the pension boost, which should take effect from 2026, will be funded. Opponents say it could spark tax hikes or spending cuts, and weigh on younger Swiss.
Switzerland's minimum old age and survivors (AHV) pension is 1,225 Swiss francs ($1,393) a month, and the maximum 2,450 francs. For couples it is capped at 3,675 francs.
Sunday's vote marks the first time that Swiss voters have accepted a popular proposal to alter the country's social security system, according to the ATS-Keystone news agency.
It is also the first time Swiss trade unions have succeeded in pushing through an initiative at the polls under the country's direct democratic system.
The government said the pension increase would cost more than four billion Swiss francs a year, which would require tax increases and could threaten the financial stability of the social security system.
But Interior Minister Elisabeth Baume-Schneider took Sunday's loss in stride, saying that "democracy is alive and kicking in Switzerland".
"The government has provided all the elements and the arguments," she told the RTS public broadcaster.
But "there will be a price to pay," she said, adding that the government and parliament would work on a proposal to ensure pensioners could receive the extra payment starting in 2026.
The SGB union federation said that Sunday's vote results "clearly show that the government, a majority of the parliament and employers have for too long ignored the pension problem".
"We are lucky to have a direct democracy that allows us to correct that," Maillard said.
RETIREMENT AGE UNCHANGED
A second issue on the ballot Sunday seeking to raise the retirement age was soundly rejected.
A full 74.72pc of voters turned down the proposal by the youth branch of the right-wing Liberal Party to gradually raise the retirement age from 65 to 66 over the next decade, a move aimed at ensuring full financing of the pension system.
A majority of voters in every Swiss canton rejected the proposal, which came less than two years after voters narrowly opted to raise the retirement age for women to 65 from 64, to match the retirement age for men.
Voter participation is generally low in Switzerland's popular votes, which are held every few months, and rarely inches above 50pc.
But Sunday's issues sparked heated debate and participation reached more than 58pc.