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Switzerland Today

Swiss news in English

Thursday, November 14, 2024

Swiss Pension Reform Sparks Controversy

Published: 2024-10-20

The Swiss Federal Council is planning a significant reform of the voluntary pension system, aiming to limit tax privileges for middle and high-income earners.

Supported by Finance Minister Karin Keller-Sutter, the reform proposes to impose capital withdrawal taxes not only on accumulated pension capital but also on income.

This change could triple the tax burden for many, particularly affecting high earners and the middle class.

The reform, developed by an expert commission led by Serge Gaillard, is expected to generate an additional 250 million Swiss Francs annually for the government.

However, it faces strong opposition from the financial and insurance sectors, which argue that it could weaken the incentive for private savings and increase reliance on social benefits.

Critics warn that the reform might discourage contributions to the second and third pension pillars, potentially upsetting the middle class who were promised tax benefits for retirement savings.