Education International
Education International

Switzerland: union launches initiative to promote decent pension for teachers

published 29 July 2016 updated 1 August 2016

When Swiss citizens hit the polls on 25 September they will have the chance to vote on a popular initiative known as AHVplus, initiated by teacher unionists, which aims to offer increased pensions to educators.

This initiative, involving relatively modest additional costs for employers and employees, would help to ensure a larger pension in the long term. The AHV is an insurance for old age or the bereaved in Switzerland, designed to support people when they can no longer work due to old age (pension) or when their provider dies.

“Saying ‘Yes’ to the AHVplus initiative corrects the trend whereby teachers and most employees pay more and more to pension funds but receive fewer retirement benefits for a longer period of time,” said Franziska Peterhans, Central Secretary of the teachers’ union Dachverband Lehrerinnen und Lehrer Schweiz (LCH).

Instead of reducing pensions and setting the retirement age at 67, industry and the government should ensure that pension losses are compensated for, she said. Otherwise, fewer people “will be able to maintain their usual standard of living in an appropriate way”, as required by the Constitution, after retirement with money received from the AHV and pension funds.

Safer option

In 2014, the Dachverband Lehrerinnen und Lehrer Schweiz (LCH) along with the Syndicat des enseignants romands(SER), both affiliated to Education International (EI), submitted with other organisations the popular initiative AHVplus of the Swiss Trade Union Federation SGB. This initiative calls for an increase of the AHV pensions by 10 percent. Together, they propose to finance the initiative with 0.4 percent of the salary for employees and employers. This results in modest additional costs for employees: around CHF40 (Swiss francs) (€38) per month for a primary school teacher. In doing that, workers enjoy a significantly higher pension. A single teacher would receive an additional CHF200 (€180) per month or CHF2,400 (€2,200) per year. For a married couple, the pension increase is CHF350 (about €320) or CHF4,200 (€3,800) per year.

According to the unions, the AHV is the safest and most efficient old-age insurance, as, for a small portion of the salary (0.4 percent), plus an equal salary contribution by the employer, everyone will receive a significantly higher pension. “No pension fund can achieve this,” Peterhans stressed.

Higher contributions, reduced benefits

Retirement benefits and pension funds have been hit due to, among other things, huge uncertainties in financial markets, she said. Setbacks in the stock exchange require remedial measures from pension funds to compensate for shortfalls, she said, insisting that persistently low interest rates mean there is almost no yield from investments. This results in higher contributions or lower benefits for insured persons.