The Swiss Federal Council has proposed financing the 13th AHV pension through an increase in the value-added tax (VAT), set to take effect in 2026. This decision comes after revised financial forecasts indicated a smaller funding gap than previously anticipated.

The VAT increase aims to maintain the AHV reserve fund at the legal minimum by 2030, despite a planned reduction in federal contributions from 20.2% to 19.5% of AHV expenses.

The proposal, which moves away from earlier plans to combine VAT hikes with higher wage contributions, will be finalized in the fall.

The government anticipates resistance in parliament, particularly from parties opposed to tax increases, but emphasizes the necessity of securing sustainable funding for the pension system.