(Bloomberg) — Swiss voters backed a plan to raise pensions, the first time in the country’s history that social benefits got an increase via plebiscite.
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The proposal to lift pensions by about 8% was supported by 58% of the electorate, according to a projection from Swiss broadcaster SRG. The plan also looks very likely to get the additionally required majority of cantons. Official results are due later on Sunday.
Polls ahead of Sunday had suggested that passing the measure would be a close call. Since 1848, Swiss voters had never passed plans to boost social benefits paid out by the state. The initiative was introduced by labor unions, who said higher costs of living had diminished pensions’ purchasing power.
A second initiative to raise the retirement age — and subsequently tie it to life expectancy — was rejected, garnering only 25% of votes.
The approval is a “watershed moment for Switzerland,” according to political analyst Georg Lutz. “Just ten years ago, with bourgeois parties and business associations against it, such a proposal would have been without any chance,” he told Bloomberg ahead of the vote.
Pensions will be raised from 2026, according to the text of the initiative. The proponents didn’t provide a plan to fund the estimated additional annual cost of 4.1 billion Swiss francs ($4.7 billion), so the vote is set to send the government — which had recommended its rejection — scrambling to find the money.
Finance Minister Karin Keller-Sutter has said that since Switzerland is already running a budget deficit, the approval will likely require an increase of value-added tax.
(Updates with SRG projections starting in second paragraph)
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