13th AVS pension: financed by employee contributions

13th AVS pension: financed by employee contributions
13th AVS pension: financed by employee contributions

The 13th AVS pension will be financed by employee contributions

Published today at 12:05 p.m. Updated 22 minutes ago

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The 13th AVS pension will be paid once a year. Its financing will be ensured by an increase in employee contributions and, possibly, an increase in VAT, the Federal Council announced on Wednesday. Despite the criticism, he maintains his project and puts it out for consultation until July 5.

The initiative of the Swiss Trade Union Union was accepted on March 3 by more than 58%. It must come into force in 2026. Its cost is estimated at 4.7 billion francs in 2030.

Without additional measures, the AVS fund, which currently has 48 billion francs, will be in the red from 2037. The distribution result will be negative from 2026.

In order to ensure the finances of the AVS, the Federal Council is therefore planning additional funding from 2026. Two options are on the table.

On the one hand, an increase in employee contributions of 0.8 percentage points; a variant which would bring in around 3.8 billion in 2023. On the other, a parallel increase in these contributions (+ 0.5 point) and an increase in VAT of 0.4 point; this variant would bring in an additional 2.4 billion in employee contributions and 1.5 billion in VAT (3.9 billion in total).

Federal reduction

At the same time, the Federal Council planned to reduce the participation of the Confederation from 20.2 to 18.7% from January 2026 and until the entry into force of the new reform.

This reduction is dictated by the strained financial situation of the Confederation. The federal contribution will still amount to 11 billion in 2026, an amount almost identical to what the Confederation pays today without the 13th AVS pension, specifies the government.

To compensate for this drop, two options are being considered. One is to draw on the AVS fund which would decrease each year, the other is to generate additional revenue via employee contributions and VAT, which would generate additional revenue of between 900 million and 1.2 billion in 2030. .

All variants make it possible to ensure the capacities of the AVS fund around 100% until the beginning of the 2030s. The level drops more significantly from the mid-2030s.

A revision for the end of 2026

To ensure the implementation of the 13th AVS pension, the timetable is tight, recalls the Federal Council. Parliament will be able to take up the matter in the fall.

At the same time, the Federal Council is already working on the new AVS reform for the years after 2030. The financial challenges are significant. On the one hand, the number of retirees is increasing more quickly than the number of active workers, on the other hand, life expectancy is increasing and pensions are paid for longer.

Measures such as an increase in the retirement age and other financing possibilities will be examined as part of the new reform.

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