Switzerland: Survey Finds Majority of Employees Retiring before Reaching Retirement Age

According to Swissinfo.ch, the NZZ am Sonntag newspaper has reported that 58% of Swiss employees stop working before the official retirement age in Switzerland. The survey conducted by the Swisscanto pension fund specialist found that only 32% continue to retirement age (65 for men and 64 for women), and just 10% carry on working beyond that age.

NZZ am Sonntag said the high number of people taking early retirement is rather surprising. The trend goes against current political thinking, which is towards raising the retirement age because of funding problems in the state pension scheme. According to the survey, raising the retirement age to over 65 is likely to continue meeting strong public resistance.
...
Swisscanto board member René Raths also expressed concern to the newspaper. He says that longer life expectancy means longer retirement, and that in 2035, there will be only 2.3 working people funding one pensioner, compared with nearly 4 at present.

Source: Swissinfo.ch "Majority of Swiss opt for early retirement, says survey" (June 3, 2018)

Switzerland: President Pushes for Tax Hike To Solve Pension Problem, Not Raising Retirement Age

In an interview with Neue Zürcher Zeitung, Swiss President (and Home Affairs Minister) Alain Berset has defended his proposed pension reform plans, which include a 1.7% increase in valued-added tax (VAT) to fund it. As reported in SwissInfo.ch, Berset specifically said that fixing a general retirement age will not solve the problem because companies will not employ older workers.

“Older workers continue to be disadvantaged. But it is true that, due to demographic changes and the shortage of skilled workers, they will be in greater demand in the future. Rigid fixation on a generally higher retirement age is the wrong approach. If we give the right incentives, more people will work longer voluntarily. The aim must be to raise the effective retirement age,” the minister told [the newspaper].

Source: "Berset pushes for tax-hike to solve pension problems' SwissInfo.ch (May 7, 2018)

Switzerland: OECD Reports Calls for Greater Efforts To Help Older Workers Stay at Work

The OECD has issued a report finding that Switzerland should do more to help older people, especially women, work longer in order to meet the challenge of a rapidly aging population. According to "Working Better with Age in Switzerland," while Switzerland has one of the highest employment rates for older workers in the OECD (in 2012, 70.5% of Swiss aged 55-64 were in work), the rate is much lower for women (61.5%), particularly if they are non-graduates (49%). In addition, the report notes that, once older workers lose their jobs, it is often difficult for them to get back into the labor market: 59% of unemployed Swiss workers aged over 55 had been out of work for more than 12 months in 2012, up from 40% a decade ago and above the OECD average of 47%.

Accordingly, the OECD recommends that Switzerland (in order of priority):

• help women by promoting their employability, make it easier for them to balance work and family life throughout their careers and remove work disincentives in the tax system and the pension system;
• make training more attractive for low-skilled workers and encourage enterprises to keep training them until the end of their careers;
• encourage social partners and pension funds to reduce incentives for early retirement in their second pillar schemes;
• support the action of the Public Employment Service in helping older workers, particularly aged 60-64, find stable jobs;
• improve the targeting of social assistance budgets for the older unemployed to help them back into work;
• encourage social partners to link pay more to experience and performance than age;and
• combat age discrimination (which remains legal in Switzerland, and is quite common.

Source: OECD News Release (October 23, 2014)

Brookings Issues Report on Retirement Trends in 20 Industrialized Countries: Recession Accelerating Delayed Retirements

A report from the Brookings Institution finds that since Great Recession, the trend toward later retirement in industrialized countries has not only continued, but has accelerated. According to "Impact of the Great Recession on Retirement Trends in Industrialized Countries," by Gary Burtless and Barry Bosworth, when the recession began most rich countries were experiencing an increase in labor force participation rates after age 60. In their paper, they examined whether the downturn slowed or reversed the trend toward higher old-age participation rates, using straightforward time series analysis to test for a break in labor force trends after 2007.

Averaging across all 20 countries in our sample, the pace of labor force participation gains has accelerated since the onset of the Great Recession. As noted, the participation rate of 60-64 year-olds increased at an average rate of 0.4 percentage points a year between 1989 and 2007. Between 2007 and 2012 the participation rate in this age group increased an average of 1.5 percentage points a year. In 12 of the 20 countries, the increase in the trend rate of participation change was statistically significant. The participation rate of 65-69 year-olds increased at an average rate of 0.1 percentage points a year between 1989 and 2007. Since 2007 the participation rate in this age group has increased an average of 0.8 percentage points a year across the sample countries. In 13 of the 20 countries, the rise in the trend rate of participation gain was statistically significant. In the oldest age group, 70-74 year-olds, the trend rate of increase in participation rose from 0.05 percentage points a year between 1989 and 2007 to 0.32 percentage points a year after 2007. In 12 of the 19 sample countries the increase in the pace of participation gain among 70-74 year-olds was statistically significant.

While countries that experienced unusually severe downturns, including Ireland and much of southern Europe, represent exceptions to this generalization, the authors conclude that, on the whole, however, the trend toward later retirement in rich countries has not been reversed as a result of the Great Recession.

According to Robert Samuelson, this study suggests that the "We may be witnessing the last gasp of early retirement" and not just in the United States.

Source: Brookings Institution Paper (December 16, 2013)

OECD Issues Reports on Country Initiatives To Stimulate Employment of Older Workers Since 2005

In a series of country notes, the OECD has evaluated the impact of recent policy reforms and measures to boost job opportunities for older workers in 21 countries which participated in the OECD 2003-05 review of ageing and employment policies. According to the OECD:

The data show a steady increase over the past decade of the employment rate of people aged over 50 in the OECD area, from 55.6% of 50-64 year-olds in 2001 to 61.2% at the end of 2011. At the same time, the effective age at which people retire has increased slightly: for men, from 63.1 in 2001 to 63.9 in 2011 and for women, 61.1 in 2001 to 62.8 in 2011. The data also reveal a striking difference in 2011 between countries in the share of people aged over 60 still working: from 63.4% in Sweden to 14.2% in Hungary (see data for countries below).

In 2006, OECD issued its report "Live Longer, Work Longer" in which it recommended steps to:

• Strengthen financial incentives to carry on working and reducing incentives to retire early;
• Tackle employment barriers on the side of employers, such as increasing awareness of anti-age discrimination laws; and
• Improve the employability of older workers, such as boosting the incentives for job centres to place older unemployed job seekers in work.

More detailed analysis will become available in a chapter of the 2013 Employment Outlook in June 2013. In addition to the 21 country reports linked below, OECD issued a scorecard on older workers  in 34 OECD countries.

• Australia
• Austria
• Belgium (in French)
• Canada (forthcoming)
• Czech Republic
• Denmark
• Finland
• France (in French)
• Germany
• Ireland
• Italy
• Japan
• Korea
• Luxembourg (in French)
• Netherlands
• Norway
• Spain (in French)
• Sweden
• Switzerland (in French)
• United Kingdom
• United States

Source: OECD Ageing and Employment Policies (October 17, 2012)

Switzerland: Companies Begin To Look to Older Workers To Fill Skills Gap

A survey conducted by Monster.ch reports that 75% of Swiss companies say they see recruitement of people over age 50 as a solution to the shortage of qualified workers. However, only 37% of them are actually regularly hiring people over age 50, and 34% say they do not want to keep people on as salaried employees once they reach age 65.

"2012 Switzerland Recruiting Trends" („Recruiting Trends 2012 Schweiz“) documents the important trends and challenges of recruitment in Switzerland and contains estimates of the economic development of the labor market, and finds that the shortage of skilled labor remains a central problem of recruitment in Switzerland. Nine out of ten employers say that the age of their employees does not really matter, and that what is important is the true performance of employees. In addition, 86.3% want to keep their employees as long as possible in the company.

Sources: Monster.ch Press Release (May 23, 2012); Genevalunch.com "Message to older workers: we love you, we want you but not just yet" (May 23, 2012)

Switzerland: Employers Lag Behind Other European Countries in Dealing with the Challenges of Aging Workforce

According to the Adecco Institute's first Demographic Fitness Index for Swiss companies, Swiss companies are less prepared for their aging workforce than the average of selected European Union member states. Specifically, in comparison with 7 EU countries (United Kingdom, France, Italy, Spain, Germany, Belgium and the Netherlands), Switzerland only ranks second last.

By 2020, compared to the year 2000, there will be over one third more Swiss workers aged 50 to 64 years, and one fifth less workers aged 30 to 44 years. While Swiss companies' awareness about these demographic changes is very high, they are among the least prepared in Europe, with almost half of all firms putting no thought at all into this and not taking measures in order to react. In fact, most (nearly 60%) have done no analysis of their company age structure.

Source: Adecco Institute Press Release (April 17, 2007)

Switzerland: Employer Group Counsels Firms on Keeping Older Workers

According to a report in the Neue Zürcher Zeitung, Rudolf Stämpfli, president of Schweizerischer Arbeitgeberverband--Switzerland's main employer group, has called on companies to extend the working lives of older employees to guarantee their retirement. At a news conference addressing aging issues, Stämpfli said that employers and society as a whole need to show greater flexibility over the question of Switzerland's ageing workforce and be more aware of the qualities of older workers.

Among other things, the employer group believes that companies' human resources strategies should be properly adapted to the older workforce. In addition to improving the counselling of employees throughout their careers, it recommends introducing alternative employment practices, including a flexible retirement age and part-time work.

A copy of Stämpfli's remarks at the press conference are available in both German and French.

Source: Neue Zürcher Zeitung (English) "Employers urge greater focus on older workers" (August 29, 2006)

Switzerland: Firms look to retain their older employees

According to the Tages-Anzeiger newspaper of Zurich, research shows firms including ABB Switzerland are seeking to address an anticipated future shortage in the labour market. The Swiss Employers' Association and the Swiss organisation for the elderly, Pro Senectute, are currently working on guidelines for firms. According to the director of the employers' association, Peter Hasler, workers should be allowed to gradually reduce their working hours before retiring completely.

A spokesman for ABB Switzerland, Lukas Inderfurth, told swissinfo his company was looking at ways of improving its policy towards workers in the 50 plus bracket. "Older workers are becoming more and more important for the firm in view of the evolving demographic situation in Switzerland," Inderfurth said. A key government advisory committee warned in October that a rise in the retirement age was inevitable in the long run, and that the "dogma" of drawing a pension from 65 would have to be abandoned. The government is also in favour of pushing back the age at which workers draw pensions, and has been withdrawing incentives to early retirement.

Source: "Firms look to retain their older employees" swissinfo (January 3, 2006) in English