First path to financing 13th annuity emerges
The Federal Council is in favor of the idea of reviewing the level of AVS reserves. Enough to temporarily free up several billions of dollars.
Elisabeth Baum-Schneider, Federal Councilor responsible for the Federal Department of the Interior.
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Two months after the historic voting on the 13thI Annuities, one idea emerging to finance this measure. At least temporarily. The Federal Council does not rule out changes in the law to take advantage of AVS’s fortunes.
“Parliament has instructed the Federal Council to develop a project by 2026 for the next stabilization reform. On this occasion the question of the level of the compensation fund will be re-examined.
Published just before Ascension weekend, this announcement from the Elisabeth Baum-Schneider department is a response to a postulate of Oliver Feller (PLR/VD) presented the next day. Yes for 13th pension. The idea of vaudois? Use the ₹47 billion (state at the end of 2022) that is in the AVS Compensation Fund.
11th amendment of AVS
These 47 billion represent 98.4% of AVS spending for the year. As per law, the level of reserves should not fall below one year of expenditure to cover any situation.
For Olivier Feller, this limit is too high. Before thinking about increasing VAT or employee contributions to finance the 13I The annuity, as proposed by the Federal Council, believes that this wealth should be reduced to a “reasonable” level.
This idea is not new. As part of 11I In the revision of the AVS, Parliament had already decided to reduce this requirement to 70%. If the project had failed in the vote, it was not contested at this point. However, returning to this 70% limit would free up $14 billion.
Will this solution be a panacea? “This is a transitional solution to pay the 13I The annuity is Oliver Feller’s response while waiting for a permanent financing mechanism that is likely to have a majority in Parliament.
And Vaudois recalls: “If reserves are currently so high, it is largely thanks to the contributions and taxes paid by today’s retirees during their working lives.” For him, “reasonably reducing the level of reserves is not only technically justified but also politically justified”.
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