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Swiss voters\u00a0backed a plan to raise pensions, the first time in the country\u2019s history that social benefits got an increase via plebiscite.<\/p>\n
The\u00a0proposal<\/a>\u00a0to introduce a 13th annual payout to pensioners was supported by 58.2% of the electorate and also met the additional requirement of being passed in the majority of Switzerland\u2019s cantons. A\u00a0second initiative<\/a>\u00a0to raise the retirement age \u2014 and subsequently tie it to life expectancy \u2014 was rejected, garnering only 25.3% of votes.<\/p>\n Polls ahead of Sunday had suggested that passing the measure that boosts pensions by about 8% would be a\u00a0close call<\/a>. Since 1848, Swiss voters had\u00a0never approved\u00a0<\/a>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\u2019 purchasing power.<\/p>\n The approval is a \u201cwatershed moment for Switzerland,\u201d according to political analyst\u00a0Georg Lutz. \u201cJust ten years ago, with bourgeois parties and business associations against it, such a proposal would have been without any chance,\u201d he told Bloomberg ahead of the vote.<\/p>\n The government-orchestrated rescue of Credit Suisse last year may have favored the result, according to\u00a0Michael Hermann, head of pollster Sotomo.<\/p>\n \u201cMany think that the entrepreneurs and managers have broken the unwritten Swiss social contract: That managers are modest with bonuses and debauchery and the people are modest with social demands,\u201d he told newspaper SonntagsZeitung. \u201cPeople have been angry for a long time about the behavior of corporations, managers, tax evaders. So you often hear now: \u2018If they help themselves, then we also want something for us\u2019.\u201d<\/p>\n Pensions will be increased from 2026, according to the\u00a0text of the initiative<\/a>. The proponents didn\u2019t 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 \u2014 which had recommended its rejection \u2014 scrambling to find the money.<\/p>\n Finance Minister\u00a0Karin Keller-Sutter\u00a0has said that since Switzerland is already running a\u00a0budget deficit<\/a>, the approval will likely require an increase of value-added tax.<\/p>\n \u201cThis is a dark day for young generations,\u201d lawmaker Christian Wasserfallen of center-right FDP said in a post on X. \u201cI\u2019m proud of all the young who are committed to secure pensions. Today we lost.\u201d<\/p>\n FDP \u2014 Keller-Sutter\u2019s party \u2014 will reject any tax hikes for businesses to fund the higher pensions, unless they are tied to structural reforms saving money, the group said in an emailed statement.<\/p>\n The pensions boost saw particularly strong backing in French- and Italian-speaking cantons, while voters in the bigger German-speaking part were more skeptical, according to government data. Turnout across the country topped 58%.<\/p>\n \u201cThe population showed that it really cares about the matter,\u201d Interior Minister\u00a0Elisabeth Baume-Schneider\u00a0told reporters in Bern, rejecting the suggestion of a so-called \u201cR\u00f6sti trench.\u201d<\/p>\n<\/div>\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n