On September 24 the Swiss will vote on an extensive reform to the retirement system. The opponents to the reform complain that a third of the beneficiaries of the AVS (the pay-as-you-go leg of the Swiss system) live outside Switzerland, arguing that these retirees’ spending does not benefit the Swiss economy. The economic impact is however minimal, and such sharp criticism clearly shows that the vote is essentially about the type of society Swiss citizens want.
The benefits payed abroad are small
The beneficiaries living outside Switzerland account for one third of all beneficiaries, but they only received 14 percent of the money paid out by the AVS (13 percent if we exclude survivors’ benefits). In other words, the average pension payment to a retiree abroad is much smaller than the one to a retiree living in Switzerland (563 Swiss francs per month vs. 1’818 francs). This shows that the retirees living outside Switzerland worked in low-paying jobs, or only worked in Switzerland for a few years (limiting their right to benefits). It is their full right to live their retirement right wherever they see fit.
The overall pension amount paid abroad (5’968 million Swiss francs per year) is a drop compared to the size of the economy, accounting for a mere 0.9 percent of GDP. In fact, the spending by Swiss tourists abroad is three times as large (imports of tourism services amount to 15’768 million Swiss francs). But no politician blames Swiss tourists for enjoying a beachside vacation in another country.
All in all, this is not really about money, is it?
It is striking to read that a politician regrets that some retirees get to live a “nice retirement” outside Switzerland. How exactly is the fact to live in dignity considered to be a problem?
Such comments at least have the merit of clarity. Opponents of the reforms are particularly upset with a monthly increase of benefits by 70 francs to all retirees. Are they really concerned about financial aspects, or do they after all consider that people benefiting from the Swiss social system have some kind of a duty to live cheaply?
On September 24 the Swiss will really vote on the type of society they want, specifically about the place that people with a limited income should have. This is clearly a matter of choice, not necessity. It is true that the retirement system needs to be adjusted, but it is important to repeat again and again that Switzerland is a prosperous country that can fully afford the adjustments planned under the reform.
